Kospi tops 3,650 mark amid strong institutional buying, U.S. rate cut hopes

The Kospi surged past the 3,650 mark on Wednesday to reach another record high, buoyed by strong institutional buying and optimism over a potential U.S. interest rate cut.

The Kospi is displayed on a screen inside the Korea Exchange in Yeouido, western Seoul, on Oct. 15. [YONHAP]

The Kospi surged past the 3,650 mark on Wednesday to reach another record high, buoyed by strong institutional buying and optimism over a potential U.S. interest rate cut.

The benchmark index closed at 3,657.28, up 2.68 percent from the previous session. After opening at 3,580.64, it climbed steadily through the day, touching an intraday high of 3,659.91. The index broke both its previous record closing high of 3,610.6 set on Friday and Tuesday’s intraday record of 3,646.77.

Institutional investors led the rally, purchasing a net 750 billion won ($527.6 million) in shares, taking over from foreign investors, whose buying momentum slowed with a 160 billion won net purchase. Retail investors offloaded around 970 billion won.

The total market capitalization reached a new high of 3.01 quadrillion won.

Despite a mixed performance on Wall Street overnight, growing expectations that the U.S. Federal Reserve could cut interest rates soon lifted sentiment.

Fed Chair Jerome Powell said at a conference in Philadelphia on Tuesday that downside risks to employment appear to have increased, signaling support for further rate cuts. He also hinted that the central bank could end its quantitative tightening (QT), or balance sheet reduction, within the coming months.

“Powell emphasized the downside risks to employment over inflation uncertainty and suggested the possibility of ending QT, reinforcing the Fed’s dovish stance — a reassuring factor for the market,” said Han Ji-young, an analyst at Kiwoom Securities.

U.S. Federal Reserve Chairman Jerome Powell responds to a question from the news media during a press conference, in Washington on Sept. 17. [EPA/YONHAP]

Adding to the upbeat mood, new government real estate regulations released Wednesday are expected to shift investment funds from property to stocks. Analysts also noted that the impact of U.S.-China trade tensions on industries such as shipbuilding appears limited.

Large-cap stocks led the gains, turning the board red — a sign of rising prices in local markets. Samsung Electronics jumped 3.71 percent to close at 95,000 won, marking an all-time closing high, while SK hynix rose 2.67 percent to 422,500 won. Samsung Biologics surged 9.74 percent on expectations of improved third-quarter earnings, and Doosan Enerbility gained 9.37 percent amid hopes of new orders.

The Kosdaq also rose 1.98 percent to close at 864.72.

The Korean won was quoted at 1,421.3 won against the U.S. dollar as of 3:30 p.m., down 0.68 percent from the previous session's close of 1,431 won.

This article was originally written in Korean and translated by a bilingual reporter with the help of generative AI tools. It was then edited by a native English-speaking editor. All AI-assisted translations are reviewed and refined by our newsroom. BY HWANG EUI-YOUNG [kim.minyoung5@joongang.co.kr]