Kospi breaks records for 3rd day
A screen at the headquarters of KEB Hana Bank in central Seoul shows the main bourse Kospi hitting an all-time high of 2,602.81 on Monday. [YONHAP]
The main index Kospi continued its winning run into a third trading day on Monday, closing the session at 2,598.19, a record high. While in session, the index broke through the 2,600 threshold - the first time in history since the Kospi was first introduced in 1983 - reaching an in-session high at 2,606.40 around noon.
The secondary Kosdaq also jumped up on Monday, punching through the 920 level for the first time in 16 years. The tech-savvy index closed the day at 927.05, just one trading day after it defied expectations, hitting 913.12 last Friday.
“Projections that the global economy will improve are being reinforced,” said Ma Ju-ok, an economist at Hanwha Investment & Securities, who predicted that the local stock market will remain bullish for a while. “The U.S. dollar continues to weaken which suggests the possibility of more foreign purchases in emerging stock markets including Korea.”
“There will not be any dramatic changes in terms of the fiscal policies of major economies in February,” said Yoo Seung-min, a strategist at Samsung Securities.
“Monetary policies will remain accommodative which means investors will still prefer high-risk assets [such as stocks].”
Reports by Samsung Securities projected that the Kospi may jump to reach the 3,000 level during the first half of this year.
Byun Joon-ho, a researcher from Hyundai Motor Investment & Securities, projected that the rally will continue into next month.
“Despite concerns that stem from domestic struggle, there are many positive elements such as a meeting of top economic officials of Korea and China slated for Feb. 2 and the PyeongChang Winter Olympics slated for Feb. 9 to 25,” Byun explained. The researcher added that consumption in the domestic market will recover and the rising pace of large-caps in the information technology and bio sectors will have a ripple effect to boost mid- and small-cap shares.
The Kosdaq’s rise was mainly driven by a rally of major bio shares on the index including Celltrion.
Some experts, however, purported that the pace will slow down after this month.
“The rising momentum is likely to slow down in February compared to January given abnormal macro-economic and valuation circumstances,” said Hong Chun-uk, an economist at Kiwoom Securities, in a report on Monday. Hong and his team explained that while decent performance in exports will play favorably, factors such as analysts downgrading the performance projections of local companies as well as the appointment of Jerome Powell as the new chairman of the Federal Reserve may hamper the local stock market from growing at a rapid pace as it did in January.
BY CHOI HYUNG-JO, CHO HYUN-SOOK [choi.hyungjo@joongang.co.kr]
with the Korea JoongAng Daily
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