South Korean stock trading volume at 8-month high

Trading volume in South Korean stock market has surged to its highest level in eight months, with investors piling into defense, nuclear energy, shipbuilding and robotics stocks, data showed.

Heavy trading activity indicates investor confidence. The bellwether Kospi index has climbed 10% since the start of the year — more than double the 4 per cent gain in the S&P 500 over the same period.

According to the Korea Exchange on Tuesday, average daily trading volume in the domestic stock market reached 1.39 billion shares so far this month. That marked the highest since June 2023, when it hit 1.51 billion shares.

Trading activity has been on an upward spiral since slowing to 1.27 billion shares in October, hit by massive outflows of foreign investors.

On the Kospi main bouse, an average of 467.7 million shares has changed hands per day since the start of this month, the highest since December last year. The Kosdaq junior market saw trading rise to 920.2 million shares, its strongest level since last September.

The domestic stock market has been recovering from the fallout of President Yoon Suk Yeol’s short-lived martial law decree in early December. Analysts anticipate that the benchmark Kospi index could comfortably surpass 2,700 this quarter.

Among the most actively traded stocks are Doosan Enerbility Co., Hanwha Ocean Co., and Hanwha Systems Co., buoyed by strong earnings. Robotics stocks, traded on the Kosdaq, have also attracted bargain hunters.

The upward momentum is expected to continue. On Tuesday, the Kospi rose 0.63% to close at 2,626.81, marking its sixth consecutive session of gains. The Kosdaq also extended its winning streak to four sessions.

“The valuation appeal and the earnings momentum in sectors such as defense and shipbuilding are rekindling investor interest,” said a fund manager at a leading asset management firm.

“Given the current trend, the Kospi will easily surpass 2,700 in the first quarter,” he added.

Write to See-Eun Lee at see@hankyung.com
 

Yeonhee Kim edited this article.