Analysts said the latest gain was mostly attributable to improved investors’ sentiment on Wall Street after U.S. Federal Reserve Chair Janet Yellen voiced “dovish” views for a gradual increase of interest rates. This caused U.S. stock prices to surge in overnight trading, which in effect bolstered the South Korean bourse. (Image: Yonhap)
SEOUL, July 13 (Korea Bizwire) – South Korea’s main bourse closed at an all-time record high Thursday, with local analysts forecasting the market to maintain its current growth momentum moving forward on the strength of technology shares.
The assessment comes as the country’s benchmark Korea Composite Stock Price Index (KOSPI) soared 17.72 points, or 0.74 percent from the previous session, to close at 2,409.49, the first time that daily trading closed above the 2,400-mark. During the trading session, the KOSPI even surged to 2,422.26 at one point as investors expressed confidence in shares.
Analysts said the latest gain was mostly attributable to improved investors’ sentiment on Wall Street after U.S. Federal Reserve Chair Janet Yellen voiced “dovish” views for a gradual increase of interest rates. This caused U.S. stock prices to surge in overnight trading, which in effect bolstered the South Korean bourse.
Kim Yong-koo, analyst at Hana Financial Investment, said Yellen’s remarks abated uncertainties over U.S. financial policy, bolstering investors’ sentiment.
While some expressed concern over the market as the KOSPI has been undergoing an upward swing for the eighth month, which can lead to the growth losing some of its steam in the near future, the latest record-breaking performance hints the market still retains potential, at least for the time being, analysts said.
Although the KOSPI may suffer a slight downturn, the index will eventually hover around 2,600 over the second-half, many observers here predicted.
“Recently, foreigners refrained from offloading shares, and instead focused on purchasing IT and chip shares including Samsung Electronics Co. and SK hynix Inc.,” said Yang Ki-in, a researcher at Shinhan Financial Corp., hinting that the market could maintain growth even if institutions sell off their holdings.
On Thursday, Samsung Electronics shot up 1.36 percent to a fresh record. No. 2 chipmaker SK hynix also advanced 2.47 percent to close at a record-breaking level.
Oh Hyun-seok, a researcher at Samsung Securities Co., echoed the view, saying the market will maintain growth as long as there are no abrupt disruptions in the global economic environment.
Mertiz Securities Co. also claimed that the market is responding positively to the U.S. Fed’s stance on the interest rate, and that the second-half earnings outlook over listed firms justifies such views.
“There is still some room for the KOSPI to grow. Over the second half, it is expected to reach 2,550,” said Park Jung-je, a researcher at Meritz claimed.
Other analysts, however, said investors should still be aware that sectors other than the IT are showing limited growth.
“Earnings outlook on most of the firms excluding IT companies have been revised down, and the potential renegotiation of the Seoul-Washington trade pact may put pressure on stocks of carmakers, steelmakers, and machinery firms,” said Lee Kyung-min, a researcher at Daishin Securities Co.
U.S. President Donald Trump has been seeking to roll out protectionist policies while calling for the renegotiation of Seoul-Washington trade pact that benefit local exporters to expand into the world’s largest economy.
(Yonhap)
