Seoul stocks hit 1-month high on foreign buying

[THE INVESTOR] South Korean share prices ended higher on the third straight day July 13 to hit a one-month high. The upward momentum was driven mainly by foreign buying, according to analysts. The South Korean won rose against the U.S. dollar.

The benchmark Korea Composite Stock Price Index 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.

Trade volume came to 353.3 million shares worth 4.6 trillion won ($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. Sentiment was further boosted by eased concerns about the so-called Brexit following the confirmation of Britain’s new leader.

Investors are also upbeat about the US economy, which reported strong job data last week. Furthermore, with additional stimulus packages expected in Japan and other major economies, they are increasingly turning away from bonds in favor of riskier assets, such as equities.

“Risk-on sentiment has strengthened on expectations of global monetary expansion in the wake of Brexit,” So Jae-yong, a stock analyst at Hana Financial Investment, told the local media.

But there are also some concerns, with some experts saying the recent rallies are little more than a “mechanical play fueled by program-based trade.”

Geopolitical risks from the recent plans announced by Seoul and US to deploy the THAAD advanced missile defense system on the Korean Peninsula is adding more uncertainty to the markets, they said.

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

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

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

(theinvestor@heraldcorp.com)