Investors welcome Japan stimulus plan
Korean stocks closed 1.42 percent higher yesterday as foreign investors scooped up blue-chip shares, analysts said. The local currency rose against the U.S. dollar.The benchmark Kospi gained 16.25 points to 1,163.2, while volume was moderate at 335.79 million shares worth 4.32 trillion won ($3.11 billion), with earners outpacing losers 556 to 266.
“The key index got a lift as foreign investors scooped up local shares, heartened by Japan’s economic stimulus packages,” said Seong Jin-kyung, an analyst at Daishin Securities.
The Bank of Japan pledged to use $11.2 billion to purchase Japanese bank shares while the Australian central bank lowered its key interest rate to a 45-year low to kick-start its economy.
Chip giant Samsung Electronics jumped 3.48 percent to 490,000 won, rebounding from a two-day loss. LG Electronics also advanced 2.95 percent to end at 73,200 won and Hynix Semiconductor added 2.36 percent to 9,100 won.
Shipbuilders and carmakers also finished sharply higher with Hyundai Heavy Industries advancing 2.19 percent to 210,000 won. Hyundai Motor also jumped 3.56 percent to close at 48,050 won.
Financial shares also recovered from recent hefty falls on relieved investor confidence. Shinhan Financial Group, which controls Shinhan Bank, spiked 4.16 percent to 27,550 won and KB Financial Group also gained 2.42 percent to 36,000 won.
Korea’s won rebounded from a two-month low as foreign investors bought more local shares than they sold for a fifth day, the longest run of net purchases in a month. The Korean currency, Asia’s worst performer last year, snapped a three-day decline after briefly falling beyond 1,400 per dollar for the first time since Dec. 10.
“A strong rebound in local stocks is giving an impetus back to the currency market,” said Ko Yun-jin, a currency dealer with Kookmin Bank in Seoul. “A rise in reserves also showed the government has enough capacity to intervene.”
The won traded at 1,389.50 per dollar in Seoul, compared with 1,390 a day earlier.
It earlier touched a low of 1,404.55. Reserves rose to $201.74 billion from $201.22 billion in the previous month, the Bank of Korea said in Seoul yesterday.
Yonhap, Bloomberg
with the Korea JoongAng Daily
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