South Korean shares shot to a record intra-day high early Friday and was set to post biggest weekly percentage gain since mid-March after the central bank gave a bullish outlook on the economy and the Wall Street closed higher overnight. The Korea Composite Stock Price Index (KOSPI) peaked at 2,364.80 points before settling back at 2,350.15 points as of 0239 GMT.
The index was still up 0.3 percent from from the record close notched on Thursday, and was holding a year-to-date gain of 16.1 percent. “More and more investors are realizing that the KOSPI has been really undervalued for the past years as the earnings of the companies improved at a fast rate starting from late last year,” said Bae Sung-young, a stock analyst at KB Securities.
The Bank of Korea on Thursday kept interest rates steady and said it may revise up its growth forecast of 2.6 percent for this year as exports are strong and the President Moon Jae-in’s administration is formulating multi-billion-dollar fiscal stimulus measures.
The KOSPI was even nicknamed as “Boxpi” from local investors due to its lack of long term movement for six years. “Now that it has just broken out of its ‘boxed-in’ trading, investors think the index has a lot more room for extra gains,” said Bae. He added that sustained demand could push the index up as high as 2,450 this year.
Offshore investors were set to be net buyers, purchasing 58.6 billion Korean won ($52.36 million) worth of KOSPI shares near mid-session, buttressing the index. Shares of LG Display gained 4 percent while Samsung SDI rose 2 percent. The South Korean won edged down as dollar weakness calms down while global oil prices made a big drop.
The won stood at 1,120.2 to the dollar, down 0.3 percent compared to Thursday’s close of 1,116.5. June futures on three-year treasury bonds gained 0.01 point to 109.48.