South Korea's stock market staged a powerful rally on ceasefire expectations, recovering most of the losses accumulated over the previous sessions. The KOSPI breached the 5,500 level intraday, while Samsung Electronics and SK hynix approached the psychologically significant thresholds of 190,000 won and 900,000 won, respectively.
The Korea Composite Stock Price Index (KOSPI) closed at 5,478.70 on May 1, surging 426.24 points or 8.44% from the previous session to rebound after five trading days. The index climbed as high as 5,512.33 intraday, posting gains exceeding 9%. The KOSDAQ also rose 63.79 points or 6.06% to close at 1,116.18. The sharp rally triggered buy sidecars on both exchanges. It was the first KOSPI buy sidecar in 10 trading days since April 18 and the first KOSDAQ buy sidecar in 18 trading days since April 6.
The KOSPI, which had closed at 5,460.46 on April 26 before falling for four consecutive sessions, recovered all four days of losses in a single trading day. The day's 426.24-point gain was the second-largest single-day advance in KOSPI history. The record remains the 490.36-point surge recorded on April 5.
Institutional investors drove the rebound, purchasing a net 4.027 trillion won ($2.9 billion) — the largest single-day institutional net buying on record. Of that amount, financial investment firms — believed to largely reflect individual investors' purchases of exchange-traded funds (ETFs) — accounted for 3.441 trillion won. Retail and foreign investors, meanwhile, took profits, with net selling of 3.763 trillion won and 612.6 billion won, respectively. Foreign investors have now been net sellers for 10 consecutive trading sessions, the longest streak since a 10-session run from April 11 to 24 last year.
Of the 921 stocks traded on the main KOSPI market, 840 — or 91% — advanced. Large-cap stocks surged across the board. Samsung Electronics (005930.KS) jumped 13.40% to close at 189,600 won, edging close to the 190,000-won mark. SK hynix (000660.KS) gained 10.66% to 893,000 won. Major semiconductor stocks, which had been dragged down by the Middle East conflict and the "turbo quant" shock, once again led the index higher.
By sector, construction stocks surged on reconstruction hopes, while securities firms also posted gains. Daewoo E&C (047040.KS) soared 24.95% and Hyundai E&C (000720.KS) rose 16.40%. Mirae Asset Securities (006800.KS) climbed 8.12%, Hankook Financial Group gained 10.62%, and NH Investment & Securities (005940.KS) advanced 7.60%. The rally was attributed to an overnight rise on Wall Street combined with ceasefire-hinting remarks by the leaders of the United States and Iran, which sharply reversed investor sentiment. South Korea's inclusion in the FTSE World Government Bond Index (WGBI) also acted as a positive catalyst for the market.
On the KOSDAQ, Ecopro (086520.KQ) surged 6.88% to become the market's largest stock by market capitalization. Samchundang Pharmaceutical, which had hit the daily lower limit the previous session, continued to plunge, falling 10.25%.
"This was driven less by fundamentals and more by a reversal of the excessive risk-aversion sentiment that had built up during the war, combined with expectations based on political statements," said Kim Seok-hwan, a researcher at Mirae Asset Securities. "Investors should use this window to review and rebalance their portfolios."