April 20, 2024
Stocks & Bonds
Kospi touches historic 2,400 mark
[THE INVESTOR] Korea’s main bourse index touched 2,400 for the first time in its history in early morning trade on June 29, before eventually settling above 2,390 in afternoon trade.
Opening at 2,396.81, up 0.6 percent from June 28’s close, the benchmark Korea Composite Stock Price Index surpassed 2,400 at around 9:50 a.m. on June 29.
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 June 27. Meanwhile, all 34 US big banks passed a Fed stress test on capital return plans June 28, boosting the banks’ share dividends and buybacks the same day.
“Foreign investors on June 29 are expected to respond to such stabilization in Europe and US rallies by buying Korean stocks,” he wrote.
As of 2 p.m., the Kospi came to 2,394.62, up 0.5 percent from the day before, as foreign and institutional investors showed buying trends of 53 billion won (US$46.4 million) and 24 billion won, respectively. Individual investors sold 112.5 billion won in stocks.
Nearly all of Korea’s equity firms and banks showed rallies as of 2 p.m., with the exception of SK Securities, its blue-chip shares and Jeju Bank
The top Kospi stocks in terms of market capitalization all showed rises.
Market bellwether Samsung Electronics rose 0.92 percent, chipmaker SK hynix inched up 0.15 percent and carmaker Hyundai Motor climbed 0.63 percent by around 2 p.m. June 29.
The second-tier Korean Securities Dealers Automated Quotations had also edged up 0.23 percent compared to June 28, at 2 p.m.
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.
As of 2 p.m., Tokyo’s Nikkei 225 had added 0.4 percent, Hong Kong’s Hang Seng rose 0.8 percent and Shanghai climbed 0.3 percent.
The local currency had strengthened against the dollar by 3.5 won at 2 p.m., as the dollar traded at 1,140.5 won.
By Son Ji-hyoung/The Korea Herald (consnow@heraldcorp.com)
Opening at 2,396.81, up 0.6 percent from June 28’s close, the benchmark Korea Composite Stock Price Index surpassed 2,400 at around 9:50 a.m. on June 29.
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 June 27. Meanwhile, all 34 US big banks passed a Fed stress test on capital return plans June 28, boosting the banks’ share dividends and buybacks the same day.
“Foreign investors on June 29 are expected to respond to such stabilization in Europe and US rallies by buying Korean stocks,” he wrote.
As of 2 p.m., the Kospi came to 2,394.62, up 0.5 percent from the day before, as foreign and institutional investors showed buying trends of 53 billion won (US$46.4 million) and 24 billion won, respectively. Individual investors sold 112.5 billion won in stocks.
Nearly all of Korea’s equity firms and banks showed rallies as of 2 p.m., with the exception of SK Securities, its blue-chip shares and Jeju Bank
The top Kospi stocks in terms of market capitalization all showed rises.
Market bellwether Samsung Electronics rose 0.92 percent, chipmaker SK hynix inched up 0.15 percent and carmaker Hyundai Motor climbed 0.63 percent by around 2 p.m. June 29.
The second-tier Korean Securities Dealers Automated Quotations had also edged up 0.23 percent compared to June 28, at 2 p.m.
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.
As of 2 p.m., Tokyo’s Nikkei 225 had added 0.4 percent, Hong Kong’s Hang Seng rose 0.8 percent and Shanghai climbed 0.3 percent.
The local currency had strengthened against the dollar by 3.5 won at 2 p.m., as the dollar traded at 1,140.5 won.
By Son Ji-hyoung/The Korea Herald (consnow@heraldcorp.com)
