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Seoul stocks spike to 1-month high on massive foreign buying

All Headlines 15:24 July 13, 2016

SEOUL, July 13 (Yonhap) -- South Korean shares pulled off a third straight day of gains to end at one-month high on Wednesday, riding on a global risk-on mood. The South Korean won rose against the U.S. dollar.

The benchmark Korea Composite Stock Price Index (KOSPI) advanced 14.32 points, or 0.72 percent, to 2,005.55.

It marks the first time in about three weeks that the KOSPI recovered the 2,000-point level.

It opened higher on foreigners' buying binge but pared early gains as individual and institutional investors sought profit-taking, a day before the Bank of Korea's monthly rate-setting meeting.

Trade volume came to 353.3 million shares worth 4.6 trillion won (US$4 billion), with advancers outnumbering decliners 459 to 343.

Foreigners net-purchased 581 billion won worth of shares Wednesday alone, while individuals and institutional investors sold a net 187 billion and 381 billion won worth of stocks, respectively.

The KOSPI's upswing came after the Dow Jones industrial average hit a record high of 18,347.67 overnight, heralding the start of a full-scale summer rally.

The global market has moved further out of Brexit trauma after the confirmation of Britain's new leader.

Investors are also upbeat about the U.S. economy, which reported strong job data last week. Also with upcoming additional stimulus packages in Japan and other major economies, they are increasingly turning away from bonds in favor of risky assets, market watchers noted.

"Risk-on sentiment has strengthened on expectations of global monetary expansion in the wake of Brexit (turmoil)," said So Jae-yong, a stock analyst at Hana Financial Investment Co.

But he cautioned against excessive optimism, pointing out there is still a wide gap between what's going on in the equity market and macroeconomic conditions.

Kim Yong-koo, a researcher at Samsung Securities Co., said, "It's hard to expect the KOSPI's sustainable advance. The recent buying trend by foreigners is a 'mechanical play' by program-based trade."

He also cited geopolitical risks from the U.S. plan to deploy the THAAD advanced missile defense system on the peninsula.

Top cap Samsung Electronics Co. rebounded 1.16 percent to finish at 1,481,000 won. A day earlier, the tech giant lost 1.68 percent, ending a three-day winning streak driven by its strong second-quarter earnings guidance.

Leading automaker Hyundai Motor Co. gained 2.65 percent to 135,500 won and leading steelmaker POSCO soared 6.82 percent to 227,000 won. SK hynix Inc. also jumped 2.03 percent to 32,650 won.

The local currency closed at 1,146.40 won against the U.S. dollar, up 1.6 won from the previous session's close.


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