KOSPI Surges 1.4% to 10-Month High, Led by SK Hynix, Hyundai

On Wednesday, the Japanese Nikkei 225 index opened 0.7% higher, reaching 37,686.66 points, with automotive and mechanical stocks leading the gains. Concurrently, the South Korean KOSPI index surged 1.4% to 2,737.92 points, marking its highest level since August 1, 2024. This upward trend in the KOSPI index was driven by strong performances from key companies such as SK Hynix and Hyundai Merchant Marine, both of which saw their stock prices rise by more than 4%.

The positive opening of the Japanese and South Korean stock markets reflects a broader optimism in the region's economic outlook. The surge in the KOSPI index, in particular, indicates a renewed confidence among investors, potentially influenced by recent economic policies and corporate earnings reports. The automotive and mechanical sectors in Japan, which are crucial to the country's industrial output, have shown resilience and growth, contributing to the overall market sentiment.

The KOSPI index's rise to its highest level in over 10 months underscores the robust performance of South Korea's stock market. This performance is likely bolstered by favorable economic indicators and strategic investments in key industries. The strong opening of both the Japanese and South Korean markets suggests a positive trend for the region's financial landscape, with investors showing a willingness to engage in the market despite global economic uncertainties.

Market focus has now shifted to the policies of the newly elected president, Lee Jae-myung, who is expected to implement measures to boost economic growth. Key areas of focus include increasing government spending, improving corporate governance, strengthening labor protections, and concluding ongoing tariff negotiations and currency consultations with the Trump administration. The South Korean economy contracted in the first quarter, showing signs of weakness even before Trump announced tariff increases in early April.

Despite political uncertainties and sluggish economic growth, the South Korean stock market and currency have shown resilience this year, outperforming most of their Asian counterparts. Since the impeachment of Yoon Suk-yeol in April, the Korean won has been one of the best-performing currencies in Asia, supported by a strong rebound in the stock market.

“Clearly, South Korea is eager to move past this chapter, and global investors are seeking more certainty,” said Massimiliano Bondurri, founder and CEO of SGMC Capital. “This is why we have seen a strong rebound so far. We believe this momentum could continue.”

From the beginning of the year until the election, the KOSPI index rose by about 12%, reflecting investors' active search for investment value after the stock market fell into a bear market earlier this year due to concerns over U.S. tariffs. The rise in the index was further boosted by gains in the industrial and energy sectors, including nuclear stocks, shipbuilding stocks, and defense exporters.

Financial stocks also contributed to the KOSPI index's pre-election rise, as investors bet on the success of the candidates' promised corporate reform policies. The strong performance of key companies and the overall market sentiment suggest a positive outlook for the South Korean economy, with investors showing confidence in the region's financial landscape despite global economic uncertainties.