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A digital board at Hana Bank’s dealing room in central Seoul shows the Kospi closing at a record 3,814.69 on October 20. / Source: Yonhap News

The Kospi surpassed the 3,800 mark for the first time on Monday, setting new intraday and closing records as investor sentiment improved on hopes of easing U.S.-China trade tensions. Strong buying by institutional and foreign investors also drove the rally.

The milestone strengthened expectations that the benchmark index could soon reach the symbolic “Kospi 4000” level.

According to the Korea Exchange, the Kospi closed at 3,814.69, up 65.80 points, or 1.76%, from the previous session. This broke the previous record of 3,748.89 set on October 17. The tech-heavy Kosdaq also climbed 1.89% to 875.77.

After a weak start, the index rebounded as institutional investors turned net buyers. Although some investors took profits after the Kospi first crossed 3,800 in morning trading, foreign investors shifted to net purchases in futures, sustaining upward momentum.

Institutional investors bought a net 642.9 billion won worth of shares, while individuals and foreigners sold 408.6 billion won and 248.4 billion won, respectively. However, foreign investors later bought 62.7 billion won in Kospi 200 futures, partially offsetting their spot market sales.

Market analysts cited growing optimism over trade policy as the key factor behind the rally. U.S. President Donald Trump said over the weekend that maintaining “100% tariffs on China is unsustainable” and confirmed plans to meet Chinese President Xi Jinping at the Asia-Pacific Economic Cooperation (APEC) summit later this month.

Hopes of easing tensions, combined with upbeat third-quarter earnings forecasts and signs of stabilization in U.S. credit risks, have boosted investor confidence.

“Expectations for U.S.-China trade reconciliation and improved U.S. credit stability are having a positive impact on Asian equities,” said Lee Jae-won, an analyst at Shinhan Investment Corp. “Under reduced external uncertainty, a rally led by large-cap stocks in semiconductors and secondary batteries is likely to continue.”

Still, some experts warned of potential volatility after the sharp rally. “Given the rapid rise in a short period, valuation pressure could emerge,” one market official said. “Rather than chasing the rally, it would be wiser to buy gradually during pullbacks.”