Hello investors,
On Monday, May 26 (trading day basis), the Korean stock market saw a strong rally driven by gains in technology stocks and a temporary easing of global trade tensions.
The KOSPI surged 2.02% to close at 2,644.40, while the KOSDAQ climbed 1.30% to finish at 725.27.
The Korean won appreciated slightly, ending at 1,364.80 KRW/USD (-0.23%).
While Korea was actively trading, the U.S. markets remained closed for Memorial Day, an important national holiday honoring fallen military service members.
🔍 Key Highlights & Market Drivers
1. Technology-Led Surge in KOSPI
Major tech stocks such as LG Energy Solution and HMM outperformed, driving the KOSPI’s sharp gains. The tech-heavy rally reflects renewed investor confidence in AI and energy sectors, amid improving earnings outlooks and solid fundamentals.
2. U.S. Tariff Delay Boosts Risk Sentiment
President Donald Trump announced a delay of EU tariffs (initially expected to be 50%) until July 9, calming trade-related fears. This decision provided global markets with short-term relief and improved investor sentiment across Asia, including Korea.
3. Korean Retail Investors Shift Back to Domestic Stocks
Korean individual investors net sold over $1 billion in U.S. stocks this month, the largest amount since October 2024, signaling a strategic return to local equities amid growing confidence in domestic market conditions.
4. Prestige Biologics Secures Major CMO Deal
Biopharma firm Prestige Biologics announced a ₩13.2 billion CMO (Contract Manufacturing Organization) deal — roughly 624% of last year’s revenue — which significantly bolstered sentiment in the biotech sector.
5. Mason Capital Plans ₩20 Billion Rights Issue
Financial services company Mason Capital revealed plans to raise ₩20 billion through a paid-in capital increase to secure operational liquidity, a move seen as precautionary amid tightening financial conditions.
6. U.S. Markets Closed for Memorial Day
As a reminder, U.S. stock and bond markets are closed today (May 27 KST) in observance of Memorial Day. Trading will resume on Tuesday (U.S. time). This temporary break often results in lighter global trading volumes and reduced liquidity during Asian hours.
📅 Upcoming Key Events to Watch
- May 28 (Wed): Nvidia Q1 earnings release – a key barometer for the global AI and semiconductor trade.
- May 29 (Thu): Bank of Korea interest rate decision – markets are watching for signals of a pivot amid subdued inflation.
- May 30 (Fri): South Korea CPI data for May – could sway expectations around future monetary policy moves.
💡 Outlook & Investment Strategy
- Stay Defensive but Opportunistic: Despite today’s tech-fueled rally, investors should be cautious amid unresolved global risks, including trade, interest rates, and geopolitical tensions.
- Focus on AI, Biotech, and Semiconductors: Sectors showing fundamental strength, such as AI-related tech, biotech (e.g., Prestige Biologics), and semiconductors, may continue to attract inflows, especially with Nvidia’s earnings and U.S. trading resuming tomorrow.
- Watch Economic Data Closely: Upcoming CPI figures and central bank decisions will likely influence market direction in the near term.
🏁 Final Thoughts
This week marks a critical juncture for both Korean and global markets. With U.S. earnings reports, inflation data, and central bank decisions looming, investors should prepare for increased volatility and shifting narratives. Use this time to reassess your portfolio, rebalance where necessary, and stay informed.
Let’s move through the week with both caution and confidence. Happy investing!