Santa Rally Pushes KOSPI Above 1,680
By Yoon Ja-young
Staff Reporter
The stock market went upward for three consecutive days on a Santa Rally, the strong stock market around Christmas.
The main index KOSPI closed at 1,682.34, Thursday, up 20.99 points, or 1.26 percent, from the previous day. It closed above 1,680 for the first time since Sept. 29.
Analysts explained that the Santa Rally magic seemed to work this year. A Santa Rally refers to a bullish bourse around the end of the year. As handsome year-end bonuses and gift shopping boosts consumption and corporate performances improve, thus putting the stock market in a strong position.
Kang Moon-sung, an analyst at Korea Investment & Securities, said that a stock market that closes with a Santa Rally each year is defined as a bull market.
"We could define this year's stock market as a bull market, as it rose by 50 percent from the beginning of the year by successfully overcoming the financial crisis," he said.
The analyst added that in each bull market since 2001, the last four trading days of the year saw a rally while bear market years have a sluggish last four days. He explained that the optimistic mood of bull market years worked positively on the year-end market.
The bluechip company POSCO rose by 1.32 percent, marking the record-high. Hyundai Motors also reached its new record-high this year, rising 3.86 percent from the previous day.
The stock market started upward upon an overnight rise on Wall Street. Window dressing by institutional investors also boosted the market. The concept refers to a buying strategy used by fund managers in the year-end to improve the performance of funds. The institutional investors bought stocks for three consecutive days.
Foreign investors also added to the rise, buying 279.4 billion won shares in the Seoul bourse. Small investors, meanwhile, sold 637.6 billion won worth of shares.
The junior, tech-heavy KOSDAQ also rose, closing at 511.19, or up 2.75 points, from the previous day.
The won closed at 1,175 won per greenback, gaining 8.6 won from the previous day. The dollar, which has been strengthening recently, weakened in the global foreign exchange market. Foreign investors, who bought stocks, added to the strengthening of the Korean currency.