South Korea‘s main bourse extended record-setting rallies for the second consecutive day Tuesday on robust institutional buying that offset foreign selling.

The benchmark Korea Composite Stock Price Index closed at 2,311.74, up 0.33 percent compared to Monday, when it reached a previous all-time high at 2,304.03.

The Kospi showed significant surge in the late morning trade. At around 11 a.m., the market index began to shoot up to around 2,320. The index hit intraday high of 2,326.57 in the afternoon trade, breaking the previous intraday record-high at 2,323.22 on May 10, when President Moon Jae-in took office. The index hovered around 2,320 until at around 2:45 p.m.

The rally came amid the latest bull ride that lasted for about a month. The top-tier market in South Korea saw 7 percent of monthly growth until Friday -- the highest in the world stock market indices. The Kospi outperformed France’s CAC 40, Nikkei of Japan and Hang Seng of Hong Kong, which rose 6.4, 6.3, 5.7 percent during the cited month respectively. 

Strong institutional buying propped up the rallies, offsetting foreign selling. Institutional investors bought stocks valued at 281.4 billion won ($250.3 million), while individual investors sold 261.9 billion won worth of stocks. Foreign investors, whose buying trend is considered an engine for Kospi rally, recorded 54 billion won worth of sales.

Energy firms led the rally in sync with the global market rally Monday fueled by the surge in oil prices as the Organization of the Petroleum Exporting Countries is expected to extend the output cut deal for nine months.

Local refiners listed on the bourse such as GS Holdings, parent company of GS Caltex, and SK Innovations, rose 2.07 percent and 1.78 percent, respectively. S-Oil, Seoul-based refiner unit under Saudi Arabia‘s Saudi Aramco, surged 1.47 percent.

Market juggernaut Samsung Electronics closed at 2,246,000 won, down 0.4 percent from Monday.

The rise bucked external uncertainties such as controversy surrounding US President Donald Trump, Greece‘s failure to secure a debt write-off deal with its European creditors as well as an explosion attack at a pop concert in the United Kingdom.

Despite persisting risks, South Korean stocks are projected to maintain at an “attractive level of valuation,” Hong Sung-bae, an analyst at NH Investment & Securities, wrote in a Tuesday report.

“It is more desirable to stick to the belief on gradual rise in stock index than to be cautious about excessive heating,” he wrote.

Hong cited current price-earnings ratio of Korean firms lower than that of mid-2011. The ratio stood at 9.4 as of May 16, while the figure in May 2, 2011, when the Kospi reached 2,228.96, came to 10.6. Lower price-earnings ratio of a firm indicates the firm has lower risk and has more room for growth.

Local currency fell against the greenback. The Won was traded at 1,124.2 won, down 5.7 won, or 0.51 percent compared to Monday closing.

By Son Ji-hyoung (consnow@heraldcorp.com)