📊 Market Summary
- KOSPI: 2,977.74 (+0.19%)
- KOSDAQ: 782.51 (+0.36%)
- USD/KRW: 1,380.90 (+0.47%)
After three consecutive gains, the Korean market showed a modest uptick. Despite mounting concerns over Middle East tensions and a weakening won, the government's announcement of a large-scale supplementary budget boosted investor sentiment.
📰 Key News and Issues
1. 🏛️ Second Supplementary Budget Submitted: ₩30.5 Trillion
The South Korean government submitted its second supplementary budget for 2025, totaling ₩30.5 trillion, including ₩10.3 trillion in cash vouchers for citizens, AI R&D, and SME support. The move aims to counter domestic consumption slowdowns and bolster job creation.
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2. 🔍 Focus on Domestic Demand & AI Investment
The budget outlines investments in AI innovation, SME support, and infrastructure to stimulate domestic consumption and restore internal demand momentum.
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3. 🌍 Ongoing Middle East Geopolitical Risks
Escalating tensions in the Middle East and volatility in oil prices have contributed to downward pressure on Asian equities. The Korean won also weakened slightly as safe-haven demand rose.
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4. 🏦 BOK Signals Continued Easing
Minutes from the Bank of Korea's latest meeting showed consensus around a cautious rate-cut trajectory. Policymakers appear ready to lower the benchmark rate to 2.25% if conditions warrant.
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5. 🤝 Korea–U.S. Trade Talks to Accelerate
Korea’s trade chief hinted that negotiations with the U.S. could reach a resolution as early as July. This offers tailwinds for exporters amid rising geopolitical tensions.
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6. 💹 Foreign & Institutional Buying Sustains Gains
Despite the stronger dollar, foreign and institutional investors continued to buy selectively, signaling confidence in undervalued Korean equities.
🔮 Outlook & Key Dates
- June 20 (Fri): Korea industrial output and trade balance release
- June 23 (Mon): Budget review begins in the National Assembly
- Late June to Early July: U.S. CPI/PCE, Korean inflation, and Korea–U.S. trade developments
The near-term outlook remains constructive with fiscal stimulus and policy support in play. However, global volatility and foreign exchange movements require cautious monitoring.
💡 Conclusion & Investment Strategy
Conclusion:
Fiscal stimulus, interest rate policy support, and improving diplomatic relations are strengthening Korea’s market resilience. Still, external risks like geopolitics and foreign exchange volatility remain key concerns.
Investment Strategy:
- Focus on Policy Beneficiaries: Construction, AI, and consumer stocks stand to benefit from government support
- Export-Driven Sectors: Semiconductor and auto sectors remain solid bets
- Currency Hedging: Investors should prepare for KRW volatility
- Watch for Buying Opportunities: Institutional accumulation may support upward trends
- Remain Nimble: Key data releases may trigger swings—manage cash accordingly
📝 Final Thoughts
Korea’s market continues to show surprising resilience amid global and domestic uncertainties. As we head into a packed calendar of macro and policy events, staying informed and flexible will be key. Stick to the fundamentals, follow the data, and ride the policy momentum smartly!