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Kospi Hits Record High Amid Policy Reversal

South Korea’s benchmark Kospi index surged to an all-time high of 3,420.23 during early trading on Monday, marking its 10th consecutive session of gains. The rally came after Finance Minister Koo Yun-cheol announced the government’s decision to scrap its planned tax hike on stock investments, a move aimed at boosting market confidence and encouraging retail participation.

Although the index pared some gains later in the session, it still closed 0.35% higher at 3,407.31. The small-cap Kosdaq index also climbed 0.66% to 852.69, reflecting broader market optimism among domestic investors.

Regional Markets See Mixed Movements

While Seoul’s markets celebrated the policy shift, other Asia-Pacific markets showed mixed trends.

• Australia’s S&P/ASX 200 slipped 0.13% to 8,853 amid concerns over slowing domestic growth and falling commodity prices.
• Hong Kong’s Hang Seng Index rose 0.23%, and the Hang Seng Tech Index edged up 0.27%, buoyed by gains in major Chinese tech stocks.
• China’s CSI 300 advanced 0.24% to 4,533.06, despite recent data showing weaker-than-expected retail sales and industrial output and a 12.9% slump in real estate investment during the first eight months of the year.
• Markets in Japan and Malaysia were closed for a public holiday.

Global Backdrop: U.S.–China Talks and Fed Meeting

Investor sentiment across the region was also influenced by ongoing U.S.–China trade and economic talks in Madrid, where senior officials—including U.S. Treasury Secretary Scott Bessent and U.S. Trade Representative Jamieson Greer—met with Chinese Vice Premier He Lifeng and top trade negotiator Li Chenggang. Discussions centered on national security, tariffs, and the upcoming deadline for TikTok’s divestment in the U.S.

Meanwhile, U.S. equity futures remained flat in Asian trading hours as global investors await the Federal Reserve’s policy meeting this week. Markets are betting that the Fed may cut interest rates when it concludes its meeting on Wednesday, following recent data signaling a cooling labor market and subdued inflation.

Wall Street’s Strong Momentum

Wall Street ended last week on a strong note, providing further support for investor sentiment in Asia:

• The Nasdaq Composite hit a fresh record high with a 2% weekly gain, its second consecutive winning week.
• The S&P 500 rose 1.6%, its best performance since early August.
• The Dow Jones Industrial Average advanced 1%, snapping a three-week losing streak.

These gains reflect growing hopes that a softer U.S. economy could push the Federal Reserve toward easing monetary policy, which would also benefit emerging markets like South Korea.