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Kospi hot streak continues as Lee strikes conciliatory tone on capital gains tax hike

Published: 11 Sep. 2025, 18:10

JIN MIN-JI
[email protected]

The Kospi closed at a record high of 3,344.20, up 0.9 percent from the previous trading day, shown on the Korea Exchange’s electronic display board in Yeouido, western Seoul, on Sept. 11. [YONHAP]

The Kospi hit a new all-time high on Thursday, surpassing the previous day's record and extending its winning streak to eight consecutive sessions, boosted further by hopes that President Lee Jae Myung may withdraw a controversial capital gains tax hike proposal and the overnight AI rally on Wall Street.

The benchmark index closed up 0.9 percent at 3,344.20, breaking the previous record of 3,314.53 posted a day earlier. Thursday's gains were led by net purchases by foreign and institutional investors, in contrast to retail investors, who unloaded on profit-taking.

Samsung Electronics rose 1.1 percent to 73,400 won ($53), while SK hynix rose 0.9 percent to 307,000 won following boosted expectations for cloud giant Oracle’s forward-looking projections. During its Tuesday earnings call, the company forecast cloud revenue of $144 billion by 2030. Oracle’s AI-driven cloud growth is also benefiting Nvidia, which in turn is increasing demand for memory chips.

Other gainers included battery maker LG Energy Solution, which jumped 2.76 percent to 350,000 won, and defense giant Hanwha Aerospace, soaring 3.93 percent to break 1 million won.

The bourse also briefly surged to 3,344.70 during intraday trading, breaking the previous record high of 3,317.77 set just a day before amid optimism for a possible top office reversal on lowering the capital gains tax threshold for stock investments from 5 billion won to 1 billion won.

During a press conference held on the day to mark the 100th day since his inauguration, Lee said that “there's no need to insist” on the revised tax threshold if the revitalization of the stock market is hindered because of it.

Investor expectations for the U.S. Federal Reserve's rate cut next week amid a weaker-than-expected labor market also drove the recent rally. The U.S. economy added fewer jobs than initially estimated for the year through March.

“The anticipated U.S. rate cuts and the withdrawal of the tax scheme have already been priced into the recent rally,” said Lee Jae-won, a market analyst at Shinhan Securities. “For the market upswing to continue, we’ll need strong corporate earnings from leading sectors like chips and shipbuilding, as well as growth stocks in sectors such as health care and software — especially if the Fed moves forward with rate cuts.”

Backed by these factors, the analyst projects Kospi will hover between 3,100 and 3,400 points in September.

But he added the market could tumble if the key U.S. economic indicators worsen to the point where investors begin to fear a recession — such as a further weakening of the labor market or a rise in headline inflation.

U.S. producer price data showed a decline for the first time in four months, fueling optimism that the U.S. central bank may cut its benchmark rate next week. Investors are now awaiting August’s consumer price index, set to be released on Thursday, which is expected to serve as a key indicator for the Fed’s next monetary policy move.

Overnight, Wall Street saw the S&P 500 close up 0.3 percent, while the tech-heavy Nasdaq Composite edged up 0.03 percent, boosted by strong gains in tech stocks, including Nvidia, AMD and Broadcom.

The secondary Korean bourse, the Kosdaq, inched up 0.21 percent to 834.76, while the local currency was quoted at 1,391.8 won against the greenback at 3:30 p.m., down 5.2 won from the previous session.

BY JIN MIN-JI [[email protected]]