Kospi hits record 2,602.59 as optimism continues after U.S. election result
The main Kospi index broke the all-time high set in 2018, largely thanks to improved investor sentiment especially from foreign investors, with decreasing uncertainties in the market after the U.S. election and the positive result of clinical tests for Covid-19 vaccines.
The benchmark Kospi rose 49.09 points, or 1.92 percent, to close at 2,602.59.
Monday’s closing price shattered the previous high of 2,598.19 set on Jan. 29, 2018, marking the highest in two years and 10 months. The highest value during the trading hours was 2,605.58.
Foreign investors bought a net 989 billion won ($890 million). Institutions unloaded a net 60.1 billion won and retail investors sold a net 873.6 billion won.
“The overall rise in stock prices of companies with top market capitalization values led to the gain of the Kospi,” said Cho Byung-hyun, a market analyst at Yuanta Securities.
Samsung Electronics, No. 1 on the Kospi market for its market capitalization value, rose by 2,800 won, or 4.33 percent, to 67,500 won, closing at a record value for the company. The anticipations for the company’s earnings next year seem to have driven the gain as the prolonged Covid-19 outbreak will likely keep boosting demand for chips.
The country's leading battery makers also got a lift, helped by U.S. President-elect Joe Biden's commitment to clean energy.
LG Chem rose by 24,000 won, or 3.31 percent, to close at 748,000 won, while Samsung SDI gained 11,000 won, or 2.14 percent, to close at 526,000 won.
SK hynix, which is second in the ranking for market capitalization values on the Kospi right after Samsung Electronics, increased by 3,200 won, or 3.31 percent, to close at 100,000 won.
“Bright prospects for Korean companies based on their profits have been sparking foreign investors’ interest in the Kospi market,” said Cho.
Cho added that the rise in stock on the Kospi market was not concentrated in a particular industry, but it was rather attributable to the strong performance of companies with high market capitalization values.
The dollar, which has been weakening against the won, also led to a surge in foreign investors, as they seek markets outside of the United States. The local currency closed at 1,110.4 won against the dollar, down 3.9 won from the previous session's close.
The Kosdaq rose by 3.11 points, or 0.36 percent, to close at 873.29.
Bond prices, which move inversely to yields, closed higher. The three-year bond lost 0.9 basis points to 0.954 percent, and the return on the 10-year bond shed 0.5 basis points to close at 0.82 percent.
BY LEE JEE-YOUNG [email@example.com]