SEOUL — The KOSPI index has hit a new all-time high for the third consecutive day, driven by strong foreign and institutional buying, a global semiconductor rally, and increasing expectations of a U.S. Federal Reserve interest rate cut. The benchmark index closed at 3,395.54, a 1.54% jump, while the tech-heavy KOSDAQ also rose 1.48% to 847.08.

This bullish momentum is largely attributed to a confluence of domestic and international factors. In a show of confidence in the Korean market, foreign investors net-purchased a staggering 1.42 trillion won on the main KOSPI board on a single day, accumulating over 4.06 trillion won so far this month. Institutional investors followed suit, adding 614 billion won. Experts point to the U.S. Fed's anticipated rate cut as the primary catalyst. According to the CME FedWatch Tool, there is a 92.7% probability that the Fed will lower its benchmark interest rate by 0.25 percentage points at the upcoming September 16-17 FOMC meeting, a move prompted by a sharp slowdown in U.S. employment. Lower interest rates are expected to flood global markets with liquidity, and foreign capital is already flowing into the Korean market in anticipation.

Semiconductor stocks led the charge, with SK Hynix reaching a new record high for the second consecutive day, soaring 7% to 328,500 won. This surge follows strong earnings from U.S. tech giant Oracle, which has fueled optimism about robust demand for AI infrastructure. Samsung Electronics also saw a healthy gain of 2.72%, closing at 75,400 won.

Beyond semiconductors, a broad range of large-cap stocks posted strong performance, including LG Energy Solution (+1.57%), KB Financial Group (+1.45%), and Naver (+1.29%). By sector, metals (+3.97%), electrical/electronics (+3.10%), and IT services (+3.10%) were among the top performers.

The KOSPI's recent rally has been particularly impressive, with a 5.89% return over the past week, placing it at the top among 42 major global indices. This outperformance is also buoyed by domestic policy signals. President Lee Jae-myung's remarks on potentially easing the capital gains tax on stock transfers for large shareholders have revived hopes for institutional reforms aimed at revitalizing the capital market.

Analysts at NH Investment & Securities anticipate the rally to continue, driven by expectations of further policy improvements and a sustained focus on sectors with low price-to-book ratios (PBR) and those poised for growth, such as AI and biotech. The total trading value on the KOSPI and KOSDAQ markets reached 13.89 trillion won and 8.25 trillion won, respectively, underscoring the strong investor sentiment.

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