The KOSPI index shattered records on January 2, the first trading day of the new year, closing above 4,300 points for the first time in its history. This marks the fifth time since the index launched in 1983 that the KOSPI has hit an all-time high on the first trading day of the year.
The Korea Exchange reported that the KOSPI finished at a staggering 4,309.63 points. Opening at a record 4,224.53 points, the index maintained its upward momentum throughout the day, propelled by robust performances in the electrical and electronics sectors.
Individual investors spearheaded the rally in the morning session, with foreign investors taking the lead later in the day. By mid-afternoon, foreign investors had snapped up 644.7 billion KRW (approximately 445.05 million USD) worth of KOSPI shares, while individual investors were net sellers to the tune of 454.4 billion KRW (approximately 313.68 million USD).
The exchange emphasized the rarity of such a feat, noting that this record-breaking start to the year has occurred only five times since the KOSPI’s launch four decades ago.
The first instance was on January 4, 1988, when the “three lows” – low oil prices, interest rates, and exchange rates – pushed the index to close at 532.04. Next was on January 2, 2006, when a surge in investment funds drove the KOSPI to 1,389.27. On January 3, 2011, increased global liquidity from U.S. quantitative easing measures saw the index close at 2,070.08. Most recently, on January 4, 2021, the index opened at 2,944.35, buoyed by the retail investor-driven “Donghak Ant Movement.”
A spokesperson for the exchange expressed optimism about the market’s trajectory, citing ongoing government initiatives to revitalize the capital market, signs of global economic recovery, advancements in artificial intelligence (AI), and robust semiconductor exports. However, they cautioned that investors should remain vigilant about potential headwinds, including exchange rate fluctuations and the impact of U.S. interest rate policies.
