Seoul Stocks Set New Record High
By Park Hyong-ki
Staff Reporter
Seoul stocks set a fresh record Monday on Wall Street gains Friday and hopes of further U.S. rate cuts.
The benchmark KOSPI closed up 34.86 points, or 1.72 percent, at 2062.92, its highest closing level ever following an intra-day high of 2,070.86. The tech-heavy junior Kosdaq market closed up 8.25 points, or 1.03 percent, at 807.31.
The Dow Jones Industrial Average ended up 134.78 points, or 0.99 percent, at 13,806.70 last Friday, despite mixed reports of corporate earnings.
Analysts said the stock market rally reflects expectations that the U.S. Federal Reserve will cut its key interest rates again this week to ease credit woes.
``There is a general consensus that even if the Fed does not cut its interest rate this week, it will slash it one more sometime toward the year's end,'' said Won Jong-hyuck, an analyst of SK Securities.
Also, rosy economic data and corporate balance sheets are spurring investors' sentiment on the stock market. China's continuing growth will continue to positively affect China-related Seoul shares such as steel and shipbuilding, analysts said.
Strong Chinese and Hong Kong stocks will set the ground for further gains for Seoul stocks, analysts said. Japan's Topix index climbed as much as 2.4 percent, the most in a month. Hong Kong's Hang Seng Index exceeded 31,000 points for the first time.
``Despite some volatility, Seoul stocks are likely to gain further on healthy business fundamentals and ample liquidity,'' said Park Hyo-jin, an analyst of Goodmorning Shinhan Securities.
However, negative factors such as skyrocketing oil prices remain, although many oil-dependent countries have been little affected, countering them by boosting alternative energy sources, he said.
Bank stocks were among the strongest performers. Kookmin Bank closed up 4.03 percent on strong quarterly earnings and Shinhan Financial Group jumped more than 6 percent.
Tech heavyweight Samsung Electronics shares rose 2.44 percent to 545,000 won. POSCO shares ended up 19,000 won, or 2.88 percent, at 677,000 won, while Hyundai Heavy Industries shares rose 13,000 won, or 2.72 percent, to 490,000 won.
The local currency finished at 906.7 won to the U.S. dollar, up 3.2 won from Friday's close, as offshore investors unloaded the greenback ahead of the Fed's anticipated rate decision.