KOSPI soars to new record high on chip rally, US rate cut hopes
Buoyed by a rally of semiconductor shares and growing hopes for a US Federal Reserve rate cut next week
KOSPI soars to new record high on chip rally, US rate cut hopes
Seoul: South Korean stocks set a new record high on Friday, extending their winning streak to a ninth session, buoyed by a rally of semiconductor shares and growing hopes for a US Federal Reserve rate cut next week.
The Korean won was trading higher against the US dollar. The benchmark Korea Composite Stock Price Index (KOSPI) surged 51.34 points, or 1.54 percent, to close at 3,395.54, breaking the all-time high of 3,344.2 posted the previous day. It marked the third consecutive day the KOSPI set a new record high, reports Yonhap news agency.
Trade volume was moderate at 444.9 million shares worth 13.8 trillion won (US$9.9 billion), with winners outnumbering losers 521 to 344. Foreigners net purchased local shares worth over 1.4 trillion won and institutions bagged 611.4 billion won, while retail investors unloaded 2 trillion won for profit taking.
"The KOSPI's rally comes in line with the bullish U.S. stock markets buoyed by expectations of a Fed rate cut and the artificial intelligence (AI) boom," Han Ji-young, an analyst at Kiwoon Securities, said.
Overnight, major U.S. indexes closed higher, with the Dow Jones Industrial Average jumping 1.36 percent, the tech-heavy Nasdaq composite rising 0.72 percent, and the S&P 500 adding 0.85 percent. Investor sentiment was boosted as the latest U.S. consumer price index (CPI) buoyed bets the Fed will move to cut key rates next week.
The CPI showed inflation is still above the Fed's 2 percent target but is calm enough for it to give the green light to cut rates, considering the weakness in the labor market. Han also said hopes that the Korean government may withdraw its controversial capital gains tax hike proposal also boosted investors' risk appetite.
During a press conference marking his first 100 days in office, President Lee Jae Myung said there is no reason to push forward with his administration's initial plan to lower the capital gains tax threshold for stock investments, which had sparked concerns for local investors.
