Market stabilizes and Kospi rises 1.26%

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Market stabilizes and Kospi rises 1.26%

Korean shares jumped more than 1 percent yesterday ahead of the Lunar New Year holiday.

The increase came as institutional investors net purchased local shares despite growing concerns over a spillover effect from financial instability in emerging markets.

When the stock market closed yesterday, the U.S. Federal Reserve was having its two-day Federal Open Market Committee meeting. Later on in the day, the Fed was to announce the direction of its monetary policy.

The benchmark Kospi rose 1.26 percent yesterday to close at 1,941.15. Retail investors and foreign investors were largely sellers while institutional investors were largely buyers. It was the second consecutive trading day that local shares jumped. On Tuesday, the Kospi increased 0.34 percent after falling 1.56 percent the previous day.

Among the top five blue chip shares, only Samsung Electronics fell while the remaining four gained ground.

Shares of Samsung Electronics dropped 0.23 percent to 1.28 million won ($1,193) while Shares of Hyundai Motor jumped 1.74 percent to close at 234,500 won. Shares of Hyundai Mobis also rose 1.81 percent to 310,000 won while shares of SK Hynix increased 2.85 percent to 37,850 won, and Posco went up 0.34 percent to 298,500 won.

Financial shares also gained.

Shares of Shinhan Financial Group jumped 3.16 percent to 45,650 won, while shares of KB Financial Group increased 3.62 percent to 37,200 won. Shares of Hana Financial Group also went up 2.76 percent to 40,900 won while shares of Woori Financial Group also increased 4.66 percent to 12,350 won.

The Korean won, meanwhile, rallied the most in six months after reports showed the annual current account surplus widened to a record. The won advanced 1 percent to 1,070.03 per dollar yesterday.

The current account surplus was $6.4 billion in December, compared with $6 billion the month before and $70.7 billion for the whole of 2013, central bank data showed yesterday.

Industrial production increased 3.4 percent last month from November, more than three times the 1 percent gain forecast in a Bloomberg survey.

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