South Korean shares finished firmly higher on Monday, with the main KOSPI index reclaiming the 3,200 mark, buoyed by positive sentiment from the United States following dovish remarks from the Federal Reserve Chair.
Powell’s Comments Spur Investor Confidence
The market rally was largely driven by comments from US Federal Reserve Chair Jerome Powell. Speaking at the Jackson Hole economic symposium on Friday, Powell noted the growing “downside risks to the labour market” and suggested that a shift in the economic outlook could “justify an adjustment to the policy stance.”
Investors widely interpreted this as a signal that the Fed may consider interest rate cuts sooner than previously anticipated. The remarks provided a significant boost to Wall Street, with the Dow Jones, S&P 500, and Nasdaq all closing sharply higher, setting a positive tone for Asian markets at the start of the week.
KOSPI and KOSDAQ See Strong Gains
On Monday, the benchmark KOSPI closed up 41.13 points, or 1.30%, at 3,209.86. The index opened stronger at 3,195.14 and gained momentum throughout the afternoon session. The junior KOSDAQ market also performed well, closing 15.51 points, or 1.98%, higher at 798.02.
Investor activity earlier in the day, around 11:20 AM, showed institutional investors as net buyers on the main board, snapping up 78.8 billion won worth of shares. Meanwhile, retail and foreign investors were net sellers, offloading 83.0 billion won and 29.4 billion won, respectively. On the KOSDAQ, foreign and institutional investors led the charge, with net purchases of 174.1 billion won and 48.9 billion won.
The positive market sentiment was also supported by a degree of bargain-hunting in key sectors, as investors looked ahead to the US-South Korea summit scheduled for the 25th and monitored the market’s reaction to recent amendments to the Commercial Act.
Performance of Major Stocks
Most of the top-listed companies on the KOSPI enjoyed a successful session. Doosan Enerbility was a standout performer, surging by 5.14%. Other major players also saw significant gains, including SK Hynix, which rose by 3.39%, and LG Energy Solution, which climbed 2.45%. KB Financial Group and Hanwha Aerospace also finished in positive territory, up 0.83% and 0.56% respectively. However, the gains were not universal, with market giants Samsung Electronics and Hyundai Motor showing mixed results, while HD Hyundai Heavy Industries edged down by 0.63%.
On the KOSDAQ, technology and biotech firms led the advance. Rainbow Robotics saw a remarkable 9.51% jump, while ABL Bio also rallied by 9.66%. Other notable risers included Sam Chun Dang Pharm (+5.93%), LegoChem Biosciences (+5.52%), and Alteogen (+4.98%).
Currency Market Update
In the Seoul foreign exchange market, the Korean won weakened slightly against the US dollar. As of mid-day, the local currency was trading at 1,388.0 won to the dollar, a decrease of 2.1 won from the previous session’s close.