Kospi breaks 2,500 as battery makers rally on inflation bill tax credit

Home > Business > Finance

print dictionary print

Kospi breaks 2,500 as battery makers rally on inflation bill tax credit

Monitors at the Hana Bank trading room in central Seoul show the day's Kospi and exchange rate figures on Monday. [NEWS1]

Monitors at the Hana Bank trading room in central Seoul show the day's Kospi and exchange rate figures on Monday. [NEWS1]

 
The Kospi hit an eight-month high Monday, closing above 2,500 points for the first time since August.
 
It hit 2,512.08, up 0.87 percent from the previous trading day, led by foreign investor buying. The Kosdaq jumped 0.88, and the won remained largely unchanged.
 
The benchmark index was last above 2,500 on August 18.
 
Foreign investors purchased around 730 billion won ($553 million) of shares, while retail investors unloaded 673.61 billion won. Institutional investors sold 28.34 billion won.
 
The increase was led by blue chip stocks and electric vehicle battery producers.
 
LG Energy Solution shares rose 2.76 percent, and Samsung SDI 1.49 percent.  
 
Battery company shares jumped on expectations of the benefits of the advanced manufacturing production credit (AMPC) in the Inflation Reduction Act (IRA).
 
LG Energy Solution could gain 5.8 trillion won of benefits from the AMPC through 2025, according to a Daishin Securities forecast Monday.
 
“The volume of the tax credit could be raised depending on the detailed guideline on the law or the number of batteries sold,” Jeon Chang-hyun, a researcher at Daishin Securities, said in the Monday report.
 
Chang raised the target price for LG Energy Solution to 750,000 won, up 15 percent from the previous target.
 
A new guidance on tax credits for electric vehicles was introduced in late March.
 
“Despite the evaluation of being overheated, reusable battery stocks strengthened expectations for the benefits from the IRA” after the recent guidelines, Kim Seok-hwan, an analyst at Mirae Asset Securities, said.
 
Semiconductor stocks continue to rise following the announcement of production cuts.
 
SK hynix rose 1.80 percent, and Samsung Electronics was up 1.08 percent.
 
SK hynix rallied more than 6 percent, and Samsung Electronics more than 4 percent on Friday.
 
Samsung Electronics announced plans to make a “meaningful” cut to chip production after a 96 percent plunge in operating profit in the first quarter.
 
The cut in chip production is the first since 1998, though it provided few details on the plan.  
 
SK hynix cut chip production last year.
 
Analysts project the cuts are to improve client sentiment, reduce concerns about falling chip prices and help maximize profit.
 
U.S. job report Friday also helped the investor sentiment.
 
The United States reported fewer jobs were added in March, coming in below expectations and indicating the cooling labor market. The country added 236,000 jobs in March, and the unemployment rate dropped to 3.5 percent.
 
Other stocks that jumped include Posco Holdings, which rose 7.85 percent, and LG Chem, which went up 5.04 percent. 

BY JIN MIN-JI [jin.minji@joongang.co.kr]
Log in to Twitter or Facebook account to connect
with the Korea JoongAng Daily
help-image Social comment?
s
lock icon

To write comments, please log in to one of the accounts.

Standards Board Policy (0/250자)