Korea’s financial indices including equity prices and foreign exchange rates gained Friday as U.S. monetary policymakers overnight hinted at a longer-than-expected stimulus package.
The benchmark KOSPI, which stayed below the 2,000 mark for five consecutive trading sessions, closed at 2,005.64, up 38.08 points from a session earlier. The secondary KOSDAQ also rose by 0.99 points to close at 512.74.
The U.S. dollar fell 4.5 won to close at 1,063.4 won, heralding another round of the Korean currency’s strong position against the greenback.
On the main bourse Korea Exchange, foreigners and institutional investors net purchased stocks worth 46.7 billion won ($42.4 million) and 197.8 billion won, respectively.
The net buying by the two groups was focused on blue chips. Samsung Electronics and Hyundai Motor climbed 2.67 percent and 2.47 percent to close at 1.462 million won and 249,000 won, respectively.
By industry, shipbuilding stocks topped the list with a growth rate of 5.17 percent, followed by banking stocks with 4.62 percent and home appliances with 4.16 percent on the main bourse.
Daewoo Shipbuilding & Marine Engineering closed 8.2 percent higher to reach 36,950 won on the back of an improved outlook over its earnings.
“The gains are attributable to abated woes over a possible tapering of quantitative easing moves by the U.S. Federal Reserve,” said an analyst at Woori Investment & Securities.
Janet Yellen, the successor to current Fed chairman Ben Bernanke, has said in a statement that the Fed still has more work to do to fuel the slowly recovering economy.
Investors on Wall Street took the remarks as an indication that the U.S. central bank won’t start the stimulus cut in December as widely speculated.
Korean analysts shared the view that Yellen gave investors a clear policy guideline that the central bank will keep quantitative easing for the time being, and a tapering will not happen this year.
Over the past three years, a fresh round of credit easing by the U.S. Federal Reserve has boosted Korean shares through the broad capital inflow into the region.
But since the second quarter of 2013, Korea’s policymakers and market participants have been concerned over the possibility that foreign investors may dump local stocks in the coming months due to the possible crisis and over reports of how the Fed pulling back from quantitative easing may affect the Korean markets.
