South Korean stocks reached a new record high Thursday, extending their winning streak to an eighth session, driven by tech gains and hopes that President Lee Jae Myung may reverse a controversial capital gains tax hike proposal. The local currency was trading lower against the greenback.
The benchmark Korea Composite Stock Price Index added 29.67 points, or 0.9 percent, to close at 3,344.2. It broke the previous all-time high of 3,314.53 posted the previous day.
Trade volume was moderate at 430.3 million shares worth 14.7 trillion won ($10.6 billion), with winners slightly outnumbering losers 462 to 403.
Foreigners and institutions were net buyers of local shares, purchasing 300 billion won and 812.3 billion won, respectively, while retail investors dumped 1.1 trillion won for profit taking.
Overnight, the S&P 500 closed 0.3 percent higher and the tech-heavy Nasdaq composite inched up 0.03 percent, driven by sharp gains in cloud provider Oracle and AI-related shares, such as Nvidia, AMD and Broadcom. The Dow Jones Industrial Average, however, closed 0.48 percent lower.
The fresh US producer price data, which showed a decline for the first time in four months, boosted optimism that the Federal Reserve will cut its key rate next week.
Investors' eyes are now on the US consumer price index for August due out on Thursday, which will provide additional clues about the Fed's monetary direction.
The overnight AI rally on Wall Street drove up the Kospi, which was further boosted by President Lee Jae Myung's press conference marking his first 100 days in office, where he reiterated his plan to foster the growth of Korea's capital markets, said Lee Kyoung-min, an analyst at Daishin Securities.
The president said there is no reason to push forward with his administration's initial plan to lower the capital gains tax threshold for stock investments, which had sparked concerns for local investors.
The analyst also attributed sharp gains in the defense and food sectors to the Kospi's rise.
In Seoul, market bellwether Samsung Electronics increased 1.1 percent to 73,400 won, while its chipmaking rival SK hynix climbed 0.9 percent to 307,000 won.
Leading battery maker LG Energy Solution surged 2.76 percent to 350,000 won, and defense powerhouse Hanwha Aerospace soared 3.93 percent to surpass 1 million won.
Major shipbuilders were also strong, with HD Hyundai Heavy jumping 2.58 percent to 517,000 won, Hanwha Ocean rising 1.72 percent to 112,600 won and HD Korea Shipbuilding advancing 2.05 percent to 423,000 won.
Top automaker Hyundai Motor expanded 1.13 percent to 223,000 won.
Notably, renewable energy companies rallied on President Lee's vow to foster the industry.
SK Oceanplant shot up more than 22 percent to 29,100 won and Doosan Fuel Cell skyrocketed 15.82 percent to 30,750 won.
Food companies were also bullish on the back of the soaring popularity of Korean culture, with instant noodle maker Nongshim escalating 19.17 percent to 488,000 won and its rival Samyang Foods gaining 5.23 percent to 1.6 million won.
But power plant manufacturer Doosan Enerbility dropped 2.56 percent to 61,000 won on the dim prospects of the domestic nuclear power industry, and Korea Electric Power lost 2.97 percent to 37,550 won.
The local currency was quoted at 1,391.8 won against the US dollar at 3:30 p.m., down 5.2 won from the previous session. (Yonhap)
