South Korean shares were set to rally for a fifth day on Thursday, notching record intraday highs in early trade, as upbeat comments from the Bank of Korea over local economic growth pushed up stocks, with further support from offshore buying. The Bank of Korea kept interest rates unchanged for an 11th straight month, opting for stability in its first policy review since President Moon Jae-in’s inauguration.
The Korea Composite Stock Price Index (KOSPI) was up 0.9 percent at 2,337.92 points as of 0236 GMT, highest level in its history. The index touched as high as 2,342.14. “Market forecasts for the future fundamentals of South Korea’s economy are getting more optimistic, attracting more investors.
The KOSPI’s upward trend is likely to continue as late as the third quarter,” said Cho Byung-hyun, a stock analyst at Yuanta Securities. Cho added that shares accelerated their gains after foreign investors turned to net buyers of local equities. Offshore investors purchased a net 86.8 billion Korean won ($77.66 million) worth of KOSPI shares near mid-session, buttressing the index.
“There will be more foreign flows into the local stock market due to the cheerful outlook,” said Cho. Foreign investors have bought a net 7.8 trillion won worth in total for this year. Advancers outnumbered decliners 492 to 306. The South Korean won also jumped in response to the release of Federal Reserve’s May policy meeting minutes where the policymakers agreed they should hold off on raising interest rates until it was clear a recent U.S. economic slowdown was temporary.
The won stood at 1,117.7 to the dollar, up 0.8 percent versus Wednesday’s close at 1,126.8. Market heavyweight Samsung Electronics gained 1 percent while steelmaker POSCO gained nearly 3 percent. June futures on three-year treasury bonds gained 0.01 point to 109.44.