April 28, 2024

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Electronic boards at a dealing room of the Hana Bank headquarters in Seoul show the fluctuations in the Kospi, currency exchange rate and the Kosdaq. (Yonhap)

The Korean stock market rallied early Wednesday, with the benchmark Kospi breaking above 2,700 points during trading hours for the first time in nearly two years as the market tracked overnight Wall Street gains.

The local benchmark Kospi touched 2,701.45 points during trading hours. The peak came shortly after it opened at 2,694.71, marking a 12.9 points rise from the previous close at 2,681.81.

After hitting the record high not seen since May 2022, the main index wiped out the gains to stand at 2,691.98 as of 2:30 p.m. as investors turned to profit-taking.

The upsurge in Seoul stocks tracked overnight gains from the US stock market led by major AI tech shares such as Oracle and Nvidia. The S&P 500 closed at a record-high, while other major indices including the Dow Jones Industrial Average and Nasdaq Composite Index also rallied.

Despite higher-than-expected US consumer price data indicating February inflation at 3.2 percent, investors' hopes of interest rate cuts in the coming months appeared undimmed.

“With the growing market expectations of the base interest rate cut, the US stocks rallied backed by the rebound in AI shares,” analyst Han Ji-young from Kiwoom Securities said. “The AI rally stretched out to the local stock market.”

Tech heavyweight Samsung Electronics' shares stood at 73,700 won, marking a 0.55 percent gain, while the country's leading automaker Hyundai Motor Group stood at 245,500 won, up 1.66 percent.

But chipmaker SK hynix shed 2.05 percent to 162,300 won, along with battery maker LG Energy Solution at 416,500 won, down 0.72 percent.

Foreign investors net bought nearly 123 billion won of shares, while institutions and retail shares are dumping around 77 billion and 63 billion won each on the market during market hours.

Korea's secondary bourse Kosdaq moved less, standing flat at 888.06 as of 2:30 p.m., slightly shedding from the opening at 892.41.

The local currency was trading at 1,313.15 won per US dollar at around lunchtime, up 2.15 won from the previous closing at 1,311 won.

Meanwhile, data from the Bank of Korea released Wednesday showed that foreign capital worth $5.59 billion was injected into local shares in February. This was the highest figure in nearly 11 years since September 2013.

Foreign investors have been on a buying streak on the local stock market for the past four months, purchasing $2.64 billion worth of shares in November, $2.52 billion in December and $2.51 billion in January.

"The inflow of foreign capital rose with the growing expectation on the rebound in the chip industry, the improvement in the current account, and the government's measures to boost the undervalued stock market,” an official from the Bank of Korea said.

In late-February, local authorities introduced a set of measures to encourage listed companies to boost their market valuation. While the directive advises companies to disclose their plans to enhance corporate value and shareholder returns, details of the program will be released in May.

By Im Eun-byel (silverstar@heraldcorp.com)
The Korea Herald