South Korea’s stock market soared Monday, sending the benchmark Kospi to an all-time high as investors applauded a key tax decision. The index jumped above the 3,400-point mark for the first time, supported by optimism about a stable investment environment. During intraday trading, the Kospi climbed as high as 3,420.23 before easing on profit-taking. By 2 p.m., it recovered to 3,409.73, up 14.19 points, or 0.42 percent. This advance capped four straight sessions of record-setting gains.
Foreign investors fueled the rally by purchasing 198.8 billion won, about 143 million dollars, in local equities by mid-afternoon. Meanwhile, retail traders sold 76.3 billion won, and institutional investors offloaded 123.8 billion won as they booked profits. Analysts said the continuing strength of foreign buying helped offset domestic selling pressure. They noted that stable policies and strong liquidity encouraged global funds to return to Korean assets. Consequently, momentum in the stock market remained intact despite brief pullbacks.
The rally followed the government’s announcement that it would maintain the current capital gains tax threshold for large shareholders. Officials decided to keep the limit at five billion won per stock holding rather than cutting it to one billion won. Deputy Prime Minister and Finance Minister Koo Yun-cheol explained that the choice balanced tax reform with market stability. He emphasized the government’s commitment to supporting economic growth through healthy capital markets. This decision reassured investors worried about possible volatility from policy changes.
Market watchers said anticipation of the policy shift had powered gains since last week. The Kospi crossed 3,300 on Wednesday and kept rising as confidence grew that tax rules would stay steady. President Lee Jae Myung reinforced expectations by suggesting flexibility if stricter rules harmed the stock market. Observers agreed that the policy reversal boosted investor sentiment and reduced fears of disruptive year-end selling. However, they cautioned that much of the benefit may already be reflected in prices.
Looking ahead, analysts expect limited upside as the market approaches technically overbought territory. They pointed to lingering concerns over tariffs and the upcoming Federal Reserve meeting. Some predicted that trading could narrow until third-quarter earnings and global policy signals become clearer. Still, experts said supportive fiscal measures and foreign inflows could sustain medium-term optimism. For now, the latest stock market milestone underscores investors’ confidence in Korea’s economic and financial outlook.
