KOSPI Index pauses its rally and pulls back, still maintaining a 16% increase for the year

The Korean stock market recently ended a strong upward cycle, with major stocks experiencing a significant pullback. The Korea Composite Stock Price Index (KOSPI) closed at 4,885.75 points, down 18.91 points, or 0.39%, after reaching an intra-day high of 4,935.48 points earlier in the day, a new high for the year. Behind this correction are profit-taking operations by investors across multiple popular sectors, with stocks of large chip companies and automakers under the most pressure. Additionally, the Korean won against the US dollar also experienced a slight depreciation.

It is worth noting that despite the adjustment on the day, the KOSPI index has maintained a strong upward trend since the beginning of the year, rising for 12 consecutive trading days with a total increase of over 16%, reflecting the overall strength of the Korean stock market since the start of the year.

Profit-taking wave emerges, chip and auto stocks collectively weaken

Trading volume was quite active on the day, reaching 648.7 million shares with a transaction value of 26.9 trillion Korean won (approximately $182 billion). The number of advancing stocks far exceeded declining stocks, with 666 and 228 respectively, indicating that there is still active buying force in the market.

However, the pressure from profit-taking ultimately suppressed the market’s gains. Analysts from Daeshin Securities pointed out that the semiconductor leaders, which led the market to new highs at the beginning of the year, are now in a short-term consolidation phase after reaching historical highs. Specifically, Samsung Electronics’ stock price fell by 2.75%, closing at 145,200 won; SK Hynix also declined by 2.75%, closing at 743,000 won.

The auto sector also performed poorly, with Hyundai Motor down 0.21% to 479,000 won, and its subsidiary Kia falling more sharply by 3.3% to 163,900 won. Conversely, defensive utility stocks like Korea Electric Power Corporation (KEPCO) performed well, with its stock price rising 16.16% to 65,400 won, indicating investor preference for defensive assets.

Diverging investor behavior, foreign capital continues to buy 79.3 billion

From a capital perspective, different investor groups showed clear divergence. Institutional investors sold stocks worth 606.2 billion won on the day, significantly reducing their holdings; in contrast, retail investors net bought 352.7 billion won, demonstrating a willingness among ordinary investors to buy on the dip; foreign investors were even more active, with a net purchase of 79.3 billion won, indicating a medium-term optimistic outlook from international capital. This divergence reflects differing judgments among market participants regarding the market outlook.

Geopolitical risks escalate, global market adjustments impact Korean stocks

This correction is not isolated to the Korean stock market but is linked to a coordinated adjustment in global markets. It is widely believed that geopolitical concerns triggered by US President Donald Trump’s push related to Greenland have exerted pressure on global risk assets, which has also affected the Korean stock market. Against this backdrop, investors tend to lock in profits at high levels, causing the KOSPI to retreat after reaching a high during intra-day trading.

By the close, the Korean won against the US dollar was quoted at 1,478.7, down 5 won from the previous trading day, reflecting cautious market sentiment. Overall, despite the correction on the day, the 16% increase since the beginning of the year indicates that the medium-term structure of the market still has support.