Korea's stock market on rightful path: Lee

Fueled by strong gains in SK hynix and other chipmakers, the South Korean benchmark Kospi soared to a new high Tuesday, briefly approaching the 3,900 mark during trading.

The Kospi hit record highs in both closing price and intraday trading. It ended at 3,823.84, up 9.15 points, or 0.24 percent, from the previous session, after having reached an intraday peak of 3,893.06.

Commenting on the rally, President Lee Jae Myung said the Korean stock market is returning to normalcy.

“The Kospi broke the 3,800 mark for the first time yesterday and is renewing its fresh high today,” Lee said during a Cabinet meeting. “Korea’s stock market is on a path toward normalization. It is returning to where it should be.”

After rising above 3,000 points in June, the index has maintained a strong upward trajectory, hitting new highs nearly every week.

“This is a process of diversifying and solidifying the public’s means of building wealth, breaking away from past investment habits that were concentrated in unproductive sectors,” Lee added.

The Kospi opened at 3,851.01, extending Monday’s rally. It soon climbed to the day’s peak of 3,893.06, surpassing 3,890 for the first time and eyeing the threshold of 3,900 points during early trading.

After reaching the peak, however, the index reversed course, retreating to the 3,810 range and hovering there until the close as foreign investors turned net sellers.

Despite the pullback, the Kospi finished at a new high, extending its winning streak to five consecutive sessions.

Foreign investors offloaded 12.5 billion won ($8.75 million) of shares, while retail investors sold 155.5 billion won. Institutional investors were the sole net buyers, purchasing 211.6 billion won of stocks.

Among individual shares, local tech giants SK hynix and Samsung Electronics led early gains on the Kospi, tracking the overnight rally on Wall Street.

SK hynix touched 502,000 won on expectations of strong third-quarter earnings, marking the first time the stock has surpassed the 500,000 won milestone.

Samsung Electronics also reached a record 99,900 won in early trading, nearing the symbolic 100,000 won mark.

After driving the Kospi higher, both chip stocks turned lower in the afternoon as profit-taking amid valuation concerns weighed on the market. SK hynix closed at 479,000 won and Samsung Electronics at 97,500 won.

Hyundai Motor also touched a 52-week high of 267,000 won on expectations of lower auto tariffs, before ending at 256,500 won, up 3.43 percent from the previous session.

The secondary Kosdaq index closed at 872.5, down 3.27 points or 0.37 percent.

Despite paring gains in afternoon trading, analysts remain optimistic about SK hynix’s growth prospects. The stock has nearly doubled in just two months, rising from 245,000 won on Aug. 21.

In September, most brokerages placed its target price in the 400,000 won range, but with the recent rally, projections now hover above 550,000 won.

“SK hynix can fully benefit from a robust growth cycle. It warrants purchase without being constrained by historical valuation levels,” said Ryu Hyung-keun, an analyst at Daishin Securities, who raised the target price to 550,000 won.

“The company ranks first in both products and technology, securing competitive advantages across each product line.”

KB Securities also lifted its target price for SK hynix to 600,000 won.

“Demand for artificial intelligence data centers and replacement demand for general servers have been rising recently,” said Kim Dong-won, an analyst at KB Securities. “A shortage in memory supply and continued price increases are expected.”