KOSPI hits a new all-time high and takes a brief breather... foreign investors and institutions buy heavily

On the 22nd, the domestic stock market is likely to see a correction after hitting a new historical high, as uncertainty surrounding the US-Iran additional negotiations combines with the pressure brought by the sharp surge the day before.

The day before, South Korea’s KOSPI (Korea Composite Stock Price Index) rose by 169.38 points (2.72%), closing at 6388.47 points, again setting a new record closing high. This surpassed the closing high of 6307.27 points on February 26, and also broke through the intraday high of 6347.41 points on February 27, just before the outbreak of war. The key drivers pulling the market were foreign investors and institutional investors. According to Korea Exchange data, in the Korea Securities Exchange market, foreign investors net bought 1.1516 trillion won, institutional investors net bought 9181 billion won, while individual investors net sold 1.9204 trillion won, taking short-term profits. This shows that in the recent period of rapid index gains, individual investors locked in profits, while foreign and institutional investors increased their buying strength centered on large-cap stocks.

The core of the upward trend lies in stocks with leading market capitalization. SK hynix rose 4.97% on expectations of improved performance, breaking through 1.2 million won during the session and setting a record high; Samsung Electronics also rose 2.10%. Second-battery stocks also performed strongly. Samsung SDI surged 19.89% on news that it would supply electric vehicle batteries to Mercedes-Benz, LG Energy Solution rose 11.42%, and POSCO Holdings rose 8.22%. Ultimately, export and growth sectors representing the Korean stock market—such as semiconductors and secondary batteries—rose together, lifting the index and leading the market to refresh its historical high.

However, overnight, the U.S. stock market environment was somewhat different. As observations spread that the second round of U.S.-Iran talks may not restart smoothly, the Dow Jones Industrial Average fell 0.59%, the S&P 500 fell 0.63%, and the Nasdaq fell 0.59%. U.S. media reported that Vice President Jay D. Vance’s trip to Pakistan was postponed, and there were reports that Iran conveyed to Pakistan its position of not participating in the second round of negotiations, which weakened market expectations for a ceasefire. In addition, at a Senate hearing, Federal Reserve Chair candidate Kevin W. Wosie emphasized the independence of the central bank and hinted that there could be changes to the monetary policy framework, which the market interpreted as a hawkish signal. If expectations for rate cuts weaken, it typically puts pressure on the stock market.

After the close, President Donald Trump said he would extend the ceasefire until Iran proposed a negotiation plan and completed the discussions, but Iran’s state television said it would not recognize this claim. This means that war-related uncertainty has not been fully eliminated. The Morgan Stanley Capital International Korea Exchange-Traded Fund (ETF), which reflects domestic investor sentiment, fell 2.17% during the regular trading session in the U.S., but rose 1.78% in after-hours trading, showing volatility. Market watchers believe that after the strong rally the previous day, short-term fatigue has increased, and profit-taking may occur today. As long as geopolitical variables and U.S. monetary policy signals do not ease, this trend could mean that even after setting historical highs, the stock market may continue for a period with large short-term swings in both directions.