Kospi gains on currency’s slight recovery
Korean stocks closed 1.58 percent higher yesterday as the local currency’s rebound against the U.S. dollar helped soothe investor sentiment, analysts said.The benchmark Kospi advanced 16.7 points to 1,071.73. Volume was moderate at 450.4 million shares worth 3.4 trillion won ($2.2 billion), with gainers outpacing losers 562 to 231.
“The Seoul bourse gained ground led by exporters and securities shares. The local currency’s movement is an important key in explaining the local stock index’s recent trends,” said Bae Sung-young, an analyst at Hyundai Securities.
The local bourse underwent choppy trading mirroring the local currency’s movement. The local currency, which rose as high as 1,536.7 won to the dollar at one point, reversed course in the morning session. But it ended at 1,549 won to the dollar, up 1 won from Friday’s close, as exporters unloaded the greenback, dealers said.
But analysts say investors were still cautious as a set of downbeat economic data and renewed geopolitical risks weighed on market sentiment. Korea and the U.S. kicked off one of their largest joint annual military exercises yesterday amid fears North Korea may test-fire a long-range ballistic missile.
“If North Korea launches what it claims is a satellite, the market will be dented in the short term. But given the track record related to North Korean news, its impact may be limited over the long haul,” said Lee Woo-hyun, an analyst at KTB Securities.
Technology stocks were strong. Market leader Samsung Electronics added 2.4 percent to 515,000 won and consumer electronics giant LG Electronics advanced 4.6 percent. LG Display climbed 2.6 percent.
Other blue chips also gained ground. Posco, the world’s fourth largest steelmaker, rose 2 percent, and Korea Electric Power, the nation’s biggest electricity supplier, added 1.5 percent. Hyundai Motor, the nation’s top automaker, climbed 1.6 percent. On the other hand, Hyundai’s smaller affiliate, Kia Motors, Korea’s second-biggest carmaker, fell 2.6 percent to its lowest in more than two months after Morgan Stanley lowered its price estimate. Morgan Stanley reduced its stock price estimate for Kia by 7.1 percent in a report yesterday. Leading brokerage house Samsung Securities gained 3.7 percent, and its rival Daewoo Securities jumped 6.6 percent. Yonhap, Bloomberg
with the Korea JoongAng Daily
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