KOSPI Rallies Over 2% on Wall Street Tailwind, Foreign Net Buying
The KOSPI traded up more than 2.1% at around 6,856 points, while the KOSDAQ rose 0.66% to 827 points. Foreigners posted net buying of about 170 billion won in KOSPI cash, about 17 billion won in KOSDAQ cash, and nearly 800 billion won in the futures market. The exchange rate traded around 1,384 won, extending its gain after the Bank of Japan's rate decision.
Overnight, Wall Street rallied broadly, with the three major indices, the Russell 2000, and the Philadelphia Semiconductor Index (up more than 3%) all advancing. Two factors were cited. One was oil price stabilization: a Reuters report that China had urged the Houthi rebels toward restraint via Iran, along with news that a Saudi oil pipeline could resume roughly half of its operations within days, sent WTI down to around $101. The other was stability in Treasury yields, as the market interpreted the FOMC outcome as resolving uncertainty, and the Bank of England's decision the previous day to hold rates while announcing a halt to gilt sales (quantitative tightening) pushed UK gilt yields lower, which in turn stabilized European and US Treasury yields.
The program's host noted that while yesterday's US rate hike is typically negative for equities, not raising rates could have heightened bond market instability and reignited inflation concerns, so the market had actually expected the hike to happen now. As the market digested this as a resolution of uncertainty rather than a short-term negative, US stocks rose, and one interest-rate issue that had been weighing on the domestic market was said to have been resolved.
A US-China summit is scheduled for September 24 next week. On the US side, OpenAI's Sam Altman and Nvidia's Jensen Huang, and on the Chinese side, the CEOs of BYD, Xiaomi, and optical communications firm Innolight, are being mentioned as possible attendees, making progress in negotiations around the summit a point of interest.
Regarding investment strategy ahead of the Chuseok holiday, a report by Daishin Securities analyst Lee Kyung-min was introduced. It noted that while short-term volatility could increase from cautious selling ahead of the holiday amid a hawkish FOMC, the market typically tends to rebound after the holiday as pent-up demand flows in, suggesting this could be viewed as an opportunity to increase positions. However, since settlement of stock sales into cash takes T+2, it was also noted that, practically speaking, those wishing to withdraw funds before the holiday need to complete their trades by Monday.