Kospi returns from holiday break with eyes on NASDAQ's all-time high

The Kospi, returning Tuesday from the Gaecheonjeol holiday, is drawing attention for whether it can extend its gains on the back of strength in US technology stocks. However, rising US Treasury yields remain a headwind, and with only three trading days left this week, a wait-and-see mood could persist.

On Friday, the Kospi closed at 7,003.74, up 32.39 points, or 0.46 percent, reclaiming the 7,000-point threshold for the first time in five sessions. The index opened down 33.08 points, or 0.47 percent, at 6,938.27, but reversed course after swinging in both directions during the session.

On the main Kospi market, institutional investors were net buyers of 381.3 billion won ($280 million). Foreign and retail investors were net sellers of 136.7 billion won and 1.72 trillion won, respectively. Samsung Electronics closed flat, while SK hynix gained 0.44 percent.

The cautious tone was attributed to investors sitting on the sidelines ahead of the Gaecheonjeol holiday and a closely watched US employment report.

The US Bureau of Labor Statistics said Friday that nonfarm payrolls rose by 29,000 in September, far below the 84,000 forecast compiled by Dow Jones.

The weaker-than-expected jobs data bolstered expectations that the Federal Reserve would hold its benchmark interest rate steady at this month's Federal Open Market Committee meeting.

While domestic markets were closed Monday for a substitute Gaecheonjeol holiday, all three major US indexes advanced. The Dow Jones Industrial Average rose 0.18 percent, and the S&P 500 gained 0.66 percent.

The NASDAQ Composite surged 286.45 points, or 1.05 percent, to close at an all-time high of 27,477.31, driven by broad gains in AI-related stocks and large-cap technology companies.

SpaceX stood out with a 7.63 percent jump after Morgan Stanley reiterated its overweight rating and set a price target of $300, while Elon Musk, the company's CEO, said he was in talks with TSMC on cooperation for semiconductor production facilities.

Meta Platforms rose 1.90 percent, Microsoft 1.48 percent and Tesla 2.20 percent, while Nvidia climbed 2.12 percent to a record closing high. Seagate surged 4.49 percent and Western Digital 6.34 percent.

Micron fell 1.02 percent and SanDisk slipped 0.92 percent. SK hynix's American depositary receipts edged down 0.06 percent. The Philadelphia Semiconductor Index rose 0.27 percent.

In the bond market, selling pressure on US Treasuries intensified again. The yield on the 10-year Treasury note — the global benchmark — climbed as high as 5.347 percent during trading, its highest level since April 3, 2002. The 30-year yield reached 5.702 percent intraday, the highest since May 2002.

Stocks managed to rise despite the surge in Treasury yields, as expectations for earnings growth among AI-related companies remained strong. A decline in global oil prices may also have supported appetite for risk assets.

Brent crude futures for December delivery fell 1.89 percent and West Texas Intermediate for November delivery dropped 1.84 percent, pressured by rising Middle Eastern crude exports and a G7 agreement to release strategic petroleum reserves.

The MSCI Korea ETF, a gauge of foreign investor sentiment toward domestic equities, fell 0.22 percent, while the Dow Jones Transportation Average dropped 1.09 percent. The Russell 2000 rose 0.50 percent.

Attention Tuesday turns to whether the Kospi can hold the 7,000-point level. Markets are focused on the Fed's minutes from its September FOMC meeting, due Wednesday, as well as Samsung Electronics' preliminary third-quarter earnings, also expected this week.

"This week, the Kospi will be influenced by US market moves during the holiday closure, the direction of the September FOMC minutes, the trajectory of US 10-year yields, and Samsung Electronics' preliminary third-quarter results," said Jung Yoon-hee, an analyst at Kiwoom Securities. "The market is expected to adjust positions while keeping a close eye on how key events shape the direction of US interest rates." Jung projected a weekly Kospi trading range of 6,800 to 7,300 points.