South Korean shares rose almost 1 percent on Tuesday, buoyed by optimism that the global stock market may log a further rise on the back of improving earnings, analysts said. The local currency fell to its lowest in two months against the U.S. dollar, lending support to local exporters.
The benchmark Korea Composite Stock Price Index gained 18.84 points to 2,012.72, after rising to as high as 2,015.54.
Trading volume was moderate at 356 million shares worth 4.04 trillion won ($3.93 billion), with gainers outpacing losers 426 to 390. Global stocks rose sharply overnight on Citigroup and other major firms’ better-than-expected earnings and a merger and acquisition in the U.S. healthcare industry.
“Overnight gains in U.S. stocks are fueling optimism that the global stock market may rise further,” said Bae Sung-young, an analyst from Hyundai Securities Co. Some analysts said Federal Reserve chief Janet Yellen’s testimony this week may set the overall tone for the financial market.
Yellen may deliver her views on interest rates during a policy testimony to the Senate Banking Committee later in the day and to the House Committee on Financial Services tomorrow, they said.
The local stock market is also building up confidence that the government will take measures to help Asia’s fourth-largest economy grow, according to analysts. Last week, the country’s central bank chief left room for a rate hike by saying that downside risks are greater than upside ones.
The new finance minister nominee also vowed to implement a series of measures aimed at boosting the economy, which is feared to relapse into a soft patch following April’s ferry disaster.
Foreign investors bought a net 265 billion won, while retail and institutional investors took the net-selling position. (Yonhap)