Will the KOSPI continue its 'Santa rally' on a U.S.-driven tailwind… Up for 3 consecutive trading days [Today's market preview]

The KOSPI index is expected to continue its 'Santa rally' on the 24th, supported by a tailwind from U.S. markets. Analysts say expectations that the U.S. economy will continue to grow, along with hopes of eased trade tensions between the U.S. and China, will help lift the index.

The KOSPI closed at 4117.32, up 0.28% from the previous day. The index has risen for three consecutive trading days since the 19th. Despite concerns over the won–dollar exchange rate nearing a recent high, foreign investors led the gains by net buying 955 billion won on the KOSPI. Institutions also net bought 350 billion won. However, individual investors net sold 1.28 trillion won, limiting the upside.

Overnight, the three major U.S. stock indexes also ended higher. The Dow Jones Industrial Average rose 0.16%, the tech-heavy Nasdaq jumped 0.57%, and the S&P 500 climbed 0.46% to 6909.79, marking an all-time closing high.

The U.S. Commerce Department's preliminary third-quarter gross domestic product (GDP) figure, on a seasonally adjusted annualized basis, showed a 4.3% increase quarter-on-quarter, far exceeding market expectations (3.3% growth). Securities firms analyzed that optimism about corporate earnings, reflecting expectations that the U.S. economy will maintain strong growth next year, was highlighted.

Hopes for eased U.S.-China trade tensions were also cited as a factor lifting the index. The U.S. Trade Representative (USTR) published the results of its 'Section 301' investigation into Chinese semiconductors in the Federal Register, saying appropriate responses including tariffs are necessary, but set any additional tariff rate at '0%'. It then said it would raise the tariff rate on June 23, 2027, 18 months later, and that the rate would be announced at least 30 days before imposition.

Seo Sang-young, Executive Director of the WM Innovation Division at Mirae Asset Securities, said, "This is a measure reflecting the agreements made at the U.S.-China summit held last October," adding, "It means the two countries are seeking to ease tensions rather than escalate friction."

Measures that can gauge investor sentiment in the Korean market mostly rose that day. The Morgan Stanley Capital International (MSCI) Korea ETF rose 1.02%, and the MSCI Emerging Markets ETF gained 0.56%. The Philadelphia Semiconductor Index also rose 0.55%, while the Russell 2000 and the Dow Transportation Index fell 0.69% and 0.24% respectively. KOSPI200 night futures rose 0.80%.

However, the won–dollar exchange rate nearing a recent high is cited as a variable. Han Ji-young, a researcher at Kiwoom Securities, said, "The burden of a rising won–dollar exchange rate is likely to remain a topic of debate for the remainder of the year," but added, "One fortunate point is that foreign investors still net bought about 2 trillion won this week despite the sharp fall in the won's value."

Eunhyuk Ryu reporter ehryu@hankyung.com