South Korea’s main bourse index touched 2,400 for the first time in its history in early morning trade Thursday, before closing at record-high.
Opening at 2,396.81, up 0.6 percent from Wednesday’s close, the benchmark Korea Composite Stock Price Index surpassed 2,400 at around 9:50 a.m. Thursday.
Following the historic touch, the Kospi closed at 2,395.66, up 0.55 percent from the day before. It marked the third this week that the Kospi hit an all-time high.
Foreign and institutional investors‘ buying led the record run. Offshore investors bought 99.9 billion won ($87.6 million) worth of stocks, while institutional investors purchased stocks worth 20.1 billion won. Individual investors sold 166,6 billion won of stocks.
Analysts hailed the 2,400 mark breakthrough as the dawn of a new era that forecasts bullish markets until next year, driven by a recovery trend in the global economy, improving Korean indices including those of exports and garnering high performances of large-cap stocks led by IT and semiconductor firms.
They also attributed the rally to foreign investors resuming a buying trend here and expectations for policies of the new Moon Jae-in administration.
Foreign buyers would resume the trend in Korea driven by signs of financial stabilization in the eurozone and the result of the US Federal Reserve’s stress test on banks, said Seo Sang-young, an analyst at Kiwoom Securities
“European Central Bank Chairman Mario Draghi has persistently shown confidence in the eurozone, while US bank stocks surged, backed by the Fed stress test result,” Seo wrote.
Draghi hinted at monetary tightening on signs of “strengthening and broadening recovery in the euro area” in a speech Tuesday. Meanwhile, all 34 US big banks passed a Fed stress test on capital return plans Wednesday, boosting the banks’ share dividends and buybacks the same day.
“Foreign investors on Thursday are expected to respond to such stabilization in Europe and US rallies by buying Korean stocks,” he wrote.
Nearly all of South Korea’s 33 equity firms and 10 banks showed rallies. Exceptions were SK Securities, which saw both its ordinary shares and preference shares drop by 6.67 percent and 20.42 percent, respectively, as well as Bookook Securities and Shinhan Financial Group that remained flat.
The top Kospi stocks in terms of market capitalization all showed rises when the market closed.
Market bellwether Samsung Electronics rose 0.5 percent, chipmaker SK hynix inched up 1.93 percent and carmaker Hyundai Motor climbed 0.63 percent.
The second-tier Korean Securities Dealers Automated Quotations had also edged up 0.32 percent compared to Wednesday to close at 668.00.
South Korean markets’ bullish run came in tune with Asian rallies following Wall Street gains, especially in technology firms and banks.
The Standard & Poor’s 500 index gained 0.9 percent, marking its highest in two months. The Dow Jones industrial average rose 0.7 percent and the Nasdaq composite rose 1.4 percent.
Tokyo’s Nikkei 225 added 0.62 percent in its closing, Hong Kong’s Hang Seng rose 1.01 percent and Shanghai climbed 0.62 percent.
The local currency had strengthened against the dollar by 2.9 won at 3:30 p.m., as the dollar traded at 1,141.1 won.
By Son Ji-hyoung (email@example.com)