A screen at the dealing room of Hana Bank headquarters in Seoul shows the benchmark KOSPI closed at 2,399.49, Monday, down 0.22 percent from the previous trading day. The secondary Kosdaq closed at 678.19, up 1.83 percent. Yonhap

The benchmark KOSPI ended the final trading day of 2024 on Monday with a lackluster performance. Although institutional low-price buying helped the index recover slightly after opening below the 2,400 level, it failed to gain momentum amid ongoing political uncertainties.

According to the Korea Exchange, the KOSPI closed at 2,399.49, marking a 0.22 percent decrease from the previous day's trading. The index had been trending downward since Dec. 23. The secondary Kosdaq posted gains, closing at 678.19, an increase of 1.83 percent from the previous trading day.

Throughout 2024, the KOSPI remained sluggish, declining for six consecutive months — a stark contrast to the growth recorded by its international peers. The last time the country's benchmark index experienced such a prolonged decline was during the global financial crisis (2008).

In the first half of the year, the domestic stock market tracked global trends, bolstered by the Corporate Value-up Program and optimism surrounding AI semiconductors.

However, the second half of the year told a different story, as concerns over a "semiconductor winter" and uncertainties surrounding Donald Trump's U.S. presidential election win weighed heavily on market sentiment.

The decline was further exacerbated by a series of domestic political crises, including President Yoon Suk Yeol's failed martial law attempt and subsequent impeachment.

"If the initial expectation was for the situation to stabilize after a short-term shock, the reality has shifted to fears of prolonged political uncertainty and its potential ripple effects on Korea's international credibility and economy," Daishin Securities analyst Lee Kyoung-min said.

As the year ends, questions linger about whether the stock market can regain momentum in January. Historically, January tends to see robust activity, driven by optimism around policy measures aimed at stimulating growth.

Despite the challenges, iM Securities analyst Lee Woong-chan noted that with many uncertainties already factored into the market, a recovery may be on the horizon.

"The pace of foreign investor outflows from the stock market has slowed, with institutional investors, including pension funds, stepping in to fill the gap left by individual investors and focusing on low-priced stocks," Lee explained.

"The Korean stock market is entering the new year at a level where further declines seem unlikely, particularly with institutional support, while the U.S. stock market begins at a point where additional gains appear more difficult to achieve."