An electronic board at a Hana Bank dealing room in central Seoul shows the Kospi closing at 3,449.62, up 42.31 points or 1.24 percent from the previous trading session. (Yonhap)
South Korea’s benchmark Kospi hit a new high on Tuesday, marking a record fifth consecutive trading day of gains. Strong foreign buying drove the index higher, while the won strengthened to around 1,370 per dollar for the first time in roughly two months.
The Kospi closed at 3,449.62 on Tuesday, up 42.31 points, or 1.24 percent, from the previous session.
The index opened at 3,421.13 and steadily extended its gains throughout the session. It climbed as high as 3,452.5 at one point before paring some of the rise toward the close, ending just below the 3,450 mark.
The rally marked the Kospi’s fifth consecutive session of record highs, both on a closing basis and in intraday trading.
Foreign investors led the rally by net purchasing shares worth 1.7 trillion won ($1.23 billion), while institutional investors net bought shares worth 78.5 billion won. Retail investors were the only net sellers, offloading 1.76 trillion won to lock in profits.
Strong foreign buying also contributed to the appreciation of the Korean won. The currency closed daytime trading at 1,378.9 won per dollar, up 10.1 won from the previous session, marking its first close below 1,380 since July 25.
The Kospi tracked overnight gains on Wall Street, led by hopes that the US Federal Reserve will cut its benchmark interest rates later this week. According to the CME FedWatch tool, the market is pricing in a 0.25 percentage point rate cut, which would bring the target range down to 4-4.25 percent.
Backed by dovish hopes, major US stock indices, including the Dow Jones Industrial Average, the tech-heavy Nasdaq Composite and the S&P 500, posted gains.
With the Fed expected to lower interest rates, investors are increasingly hopeful that the Bank of Korea could bring down its policy rate, which has been sitting at 2.5 percent since May.
Analysts noted that the latest rally is being driven by both policy initiatives and favorable macroeconomic conditions.
“The rally is supported not just by stock market stimulus measures but also by the broader macroeconomic environment,” analyst Lee Eun-taek at KB Securities said, referring to the relatively weaker dollar, low oil prices and low interest rates.
“The upward momentum is being sustained by the rally of US tech shares on prospects of a rate cut and by expectations of domestic policy support,” said Lee Kyung-min, an analyst at Daishin Securities.
silverstar@heraldcorp.com