Kospi eyes second straight gain on Wall Street rally, easing Middle East tensions

The Kospi, which posted its biggest-ever single-day gain in the previous session, is drawing attention Monday as investors watch whether it can extend its rally on the back of a strong Wall Street finish and easing geopolitical tensions in the Middle East.

Profit-taking after the index's more than 17% surge in a single session is seen as a key variable, with market participants closely watching the direction of trade in the early going.

According to Korea Exchange, the Kospi surged 1,001.89 points, or 17.91%, to close at 6,595.45 on Friday, snapping a three-session losing streak. The gain marked the largest single-day advance in both points and percentage terms in the index's history. The benchmark had shed a total of 1,162.19 points over the previous three sessions — from July 28 through July 30 — driven by a semiconductor selloff, but recovered 86% of those losses in a single day.

The Kospi's total market capitalization climbed back above 5,000 trillion won ($3.47 trillion). Including data from alternative trading system Nextrade, foreign investors net purchased 8.77 trillion won — the largest net buying on record — while retail investors net sold 10.38 trillion won, also a record.

Foreign buying was concentrated in semiconductor stocks. SK Hynix surged 29.95% to close at the daily upper limit of 1.72 million won, while Samsung Electronics soared 26.81%, instantly reclaiming the 260,000 won level.

The Kosdaq also rallied on Friday, rising 74.98 points, or 11.63%, to close at 719.76 — the second-largest percentage gain in the index's history. Buy-side sidecar mechanisms were triggered on both the Kospi and Kosdaq markets during the surge.

On Wall Street last Friday, Amazon's strong earnings stoked buying in technology stocks, lifting all three major indexes. The Dow Jones Industrial Average rose 0.53%, the S&P 500 gained 0.70% and the Nasdaq Composite climbed 1.00%.

Amazon reported quarterly sales topping $200 billion for the first time, driven by cloud business growth, sending its shares up 15.32%. Improved sentiment toward tech stocks helped Nvidia, up 2.93%, reclaim the top spot by market capitalization for the first time in four sessions, while Broadcom rose 0.37%. The Philadelphia Semiconductor Index edged up 0.07%.

Apple, however, tumbled 7.35% after its Sunday earnings release, in which the company projected limited sales growth in the July-September period due to supply constraints. SK Hynix's American depositary receipts, which had surged 17.5% in the prior session, also pulled back 3.54%.

Over the weekend, tensions between the United States and Iran showed signs of easing. President Donald Trump abruptly called off a military operation against Iran — which had been expected over the weekend — late Saturday local time.

Trump announced on his Truth Social platform that he had been asked to stand down from any attack after receiving agreement from Iran and other Middle Eastern nations on a framework for a deal. "This agreement includes the immediate, complete and total opening of the Strait of Hormuz and the end of Iran's nuclear threat," he said.

West Texas Intermediate crude futures were trading at $80.65 per barrel, down 4.75% from the previous session.

Whether the domestic market can sustain its upward momentum on the back of Wall Street's gains and reduced Middle East tensions remains the key question for Monday's session. The MSCI Korea exchange-traded fund, a gauge of foreign investor sentiment toward Korean equities, fell 2.55% during regular New York trading hours but trimmed its loss to 0.22% in after-hours trade.