Kospi hits year-high on postelection optimism
South Korea's benchmark Kospi surged to a year-high as of press time on Wednesday, driven by political clarity following President Lee Jae-myung's election victory.
The Kospi stood at 2,764.34 as of 2 p.m. Wednesday, marking a gain of 65.3 points, or 2.42 percent, from the previous trading session on Monday. The Korean bourse was closed on Tuesday in observance of the presidential election.
The index opened at 2,737.92, trading higher from the outset as bullish sentiment carried over from the premarket hours. It continued to gain momentum throughout the morning session, reaching as high as 2,768.37 during intraday trading. This marks the first time the Kospi has surpassed the 2,760 threshold since August 2024.
Foreign and institutional investors were net buyers on the day, purchasing 668 billion won ($486 million) and 441 billion won worth of shares on the benchmark index, respectively. Retail investors were the only net sellers, offloading 1.07 trillion won worth of stocks to lock in profits.
Amid the market upturn, bellwether Samsung Electronics rose to 57,550 won, up 1.23 percent as of 2 p.m. Its crosstown rival SK hynix jumped 5.5 percent to 219,000 won.
The secondary Kosdaq index stood at 750.42 as of 2 p.m., rising 10.13 points, or 1.37 percent, from the previous session. It opened at 749.13 and touched a day-high of 752.75 during intraday trading before paring some gains.
'In the next two to three weeks, the market will assess the likelihood of President Lee Jae-myung addressing the Korea discount and potentially driving the Kospi toward the 5,000-point milestone, while keeping a close eye on key pledges such as Commercial Act reforms and mandated cancellation of treasury shares,' said Han Ji-young, an analyst at Kiwoom Securities.
Though the Korean won was expected to gain strength following Lee's victory, which reduced political uncertainty that had weighed on its valuation, the currency remained largely flat throughout the day as the strengthening US dollar offset its appreciation.
The greenback rebounded from a six-week low on Tuesday after recent data reinforced the resilience of the US labor market.
As of 2 p.m., the Korean won was quoted at 1,374.03 per dollar, gaining approximately 3 won from the previous trading session. It opened at 1,375.9 per dollar.
'Since all major presidential candidates had emphasized boosting domestic demand, the election outcome was not expected to have a significant impact on the currency exchange path,' said Lee Joo-woon, an economist at Daishin Securities. 'The political uncertainty had already been resolved with the impeachment of former President Yoon Suk Yeol and the scheduling of an early presidential election.
'However, the implementation of policies that had been stalled paves the way for economic recovery, which is expected to support further appreciation of the Korean won.'
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