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Stocks strengthen for second day

The nation’s stock market saw gains for the second consecutive day amid emerging investor sentiment that the Korean economy is not critically exposed to external woes.

The Korea Composite Stock Price Index climbed by 11.2 points from a day before to close at 1,817.44 though the index plunged during the early part of the trading session.

The secondary KOSDAQ market also gained 15.69 points, or 3.46 percent, to close at 469.24.
A dealer at Korea Exchange Bank monitors the trend of Seoul stocks on Thursday. (Ahn Hoon/The Korea Herald)
A dealer at Korea Exchange Bank monitors the trend of Seoul stocks on Thursday. (Ahn Hoon/The Korea Herald)

Korean shares’ gaining for second trading sessions in a row is noteworthy while major stock markets in the United States and Europe tumbled again.

Another positive prospect for the local stock market is that the KOSPI inched up despite foreign investors’ continuous selling.

While foreigners disposed of stocks worth 284.7 billion won ($268.5 million) on the main bourse, institutional and small investors purchased stocks worth 160.9 billion and 97.9 billion won respectively.

Though the Korean currency lost the ground to the U.S. dollar again, the pace of depreciation has slowed on the day. The U.S. greenback gained 1.8 won to close at 1,081.8 won.

Some dealers predict the depreciation spree will soon end, citing massive dollar-denominated funds are poised to inflow to the local market.

Earlier in the day, Financial Services Commission Chairman Kim Seok-dong told a radio program told a radio program that foreigners have been selling local stocks while they have been buying local bonds.

“This (their buying bonds) means foreigners do not regard the Korean economy as problematic,” he said.

But the nation’s chief financial regulator hinted Thursday that Korea could also suffer a certain period of slowdown in economic growth from the European debt crisis though he downplayed the possibility of big negative impacts.

“While the nation is not expected to be severely hit by the crisis for a short term, it will possibly take longer time in terms of (global) economic recovery.”

His remarks could be interpreted as a resolute instruction for the local financial companies to brace for a possible economic slowdown in the coming months or years, regulatory officials said.

FSC Chairman Kim stressed that the close coordination with the Group of 7 countries or the Group of 20 countries are significant to minimize side effects from the possible economic downtown.

He also said the nation is ready to take firm and immediate measures to counter the ongoing financial turmoil.

“Depending on market situations, we could take necessary actions on the stock market immediately.”

Meanwhile, Financial Supervisory Service Gov. Kwon Hyouk-se is scheduled to hold a meeting with chief executive of 20 foreign financial companies to notify them of exact situation of the local market and regulatory policies.

By Kim Yon-se (kys@heraldcorp.com)
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