KOSPI breaks through 7,000 points, closing at 7,384.56 points... foreign capital inflows dominate

After the KOSPI index first broke through the 7,000-point mark, the likelihood of it continuing to rise for a 7th consecutive day increased, and whether the domestic stock market can set new records has attracted close attention.

On the 6th, the KOSPI index rose by 447.57 points (6.45%) from the previous trading day, closing at 7,384.56 points, once again setting a new all-time high based on the closing price. This was the first time since it first broke 6,000 points on February 25 that, after 70 days, it surpassed 7,000 points in just 47 trading days. On that day, the total market capitalization of KOSPI first exceeded 60,000 trillion won, and trading value also neared 60,000 trillion won, showing just how strong the investment boom is. Foreign capital was the core force behind this surge. Based on the standard market closing benchmark, foreign investors net bought 31,346 trillion won in KOSPI, setting the largest net-buying record in history.

This blowout rally was, to a large extent, driven by an external environment that also turned more friendly. Most importantly, as expectations for ceasefire and end-of-war negotiations between the United States and Iran heated up, international oil prices fell sharply. On the New York Mercantile Exchange, the May delivery price of West Texas Intermediate (WTI) crude oil fell 7.03% from the previous trading day to close at $95.08 per barrel, again dropping back below $100. Easing tensions in the Middle East will reduce concerns about disruptions to oil supply, which helps lessen the burden of prices and interest rates. For the stock market, such changes typically become a factor that boosts risk-asset preference. U.S. President Donald Trump also said that the likelihood of reaching an agreement with Iran is very high, further raising market expectations.

In addition, strength in U.S. technology and semiconductor stocks further propelled the domestic stock market. Overnight, the U.S. stock market saw the S&P 500 index rise 1.46% and the Nasdaq Composite index gain 2.02%, with both hitting fresh record highs, while the Dow Jones Industrial Average also rose 1.24%. In particular, the Philadelphia Semiconductor Index surged 4.48%. After Intel jumped by about 13% during regular trading hours, AMD also soared in after-hours trading as first-quarter earnings improved, lifting expectations for the entire semiconductor industry. This trend also became the backdrop for domestic funds to concentrate their purchases of Samsung Electronics and SK Hynix. These two stocks rose 14.41% and 10.64%, respectively, leading the index higher.

However, some believe that even if the intraday rally continues on the 7th, whether it can deliver the same explosive gains as the previous day still needs further observation. The previous day’s surge may increase short-term profit-taking sentiment. In U.S. after-hours trading, British semiconductor design company ARM and quantum computing company IonQ turned weaker after releasing their results, which may cool investment sentiment for some technology stocks. ARM, despite strong quarterly performance, fell by more than 7% in after-hours trading after hinting that profits in the next quarter may decline; IonQ also fell by nearly 7% due to news that commercialization of its core systems has been delayed. In addition, the U.S. April employment report scheduled to be released on the 8th is a key indicator directly affecting the Federal Reserve’s interest-rate judgment, so pre-release caution may also limit the upward space for the domestic stock market.

Ultimately, the market will likely fluctuate as it factors in upside drivers such as easing Middle East risks and expectations for improved conditions in the semiconductor sector, while also adjusting for factors such as short-term overheating pressure and uncertainties in monetary policy. At present, stable oil prices and inflows of foreign capital create a friendly environment for the domestic stock market, but the subsequent trend will depend more on U.S. employment indicators and the interest-rate outlook, as well as whether semiconductor earnings expectations can translate into actual corporate value.