By Kang Seung-woo
Korean stocks topped the 1,800 level for the first time in more than two years Friday on the back of an overnight rally in the U.S. market fueled by eased concerns over a double dip recession in the world’s largest economy.
The Korea Composite Stock Price Index (KOSPI) rose 18.22 points, or 1.02 percent, to end at 1,802.58, the highest since June 9 2008 when the benchmark index closed at 1,808.96. The tech-laced Kosdaq also advanced 2.62 points, or 0.54 percent, to 484.48 points.
Buoyed by the bullish run on the stock market, the local currency continued to rise against the U.S. dollar for the third straight day to hit a one-month high after finishing the day at 1,165.70 won, up 1.70 won from the previous close.
Foreign investors led the upturn, switching to net buying after two straight sessions of net selling. They added a net 539.5 billion won worth of local stocks.
Analysts believe that investors purchased local shares on expectations that the U.S. economy will avoid a double-dip recession thanks to better-than-expected jobless claims in the U.S. and strong U.S. trade data.
“There have been concerns about a double-dip recession in the United States, but entering this week, the country has come up with better-than-expected economic readings, which eased the uncertainty and eventually affected the KOSPI,” Samsung Securities analyst Kim Seong-bong said.
“In addition, the U.S. government rolled out an economic stimulus plan and it contributed to the data, too,” he added. “I think it will remain above the level thanks to U.S. stimulus plan and Chinese rebound in the leading composite index.”
The Obama administration proposed a $50 billion job program earlier this week to rebuild infrastructure and U.S. stocks ended higher Thursday on improved jobs and trade data. The Dow Jones industrial average gained 0.27 percent and the tech-savvy Nasdaq composite soared 0.33 percent.
Blue chip tech exporters pulled a bull run as investors bet on solid global demand. Market heavyweight Samsung Electronics rose 1.32 percent to 766,000 won and chip giant Hynix Semiconductor added 1.72 percent to 20,650 won.
In the meantime, the Asian stock markets enjoyed a bullish run. Japan’s Nikkei Share Average jumped 1.55 percent on rising imports in China, while China’s Shanghai Composite rose 0.26 percent to finish at 2,663.21.