Main stock index breaks 2,000 for 1st time since 2007

Korea’s benchmark stock index KOSPI closed at 2,009.05 points Tuesday, recovering to the 2,000 mark for the first time since 2007.

With only 55.8 points to go before reaching a record high of 2,064.85 posted on Oct. 31, 2007, the KOSPI is expected to shatter the mark soon.

Stocks rose 12.46 points or 0.62 percent Tuesday to close at 2,009.05. The combined capitalization of the domestic securities market was 1,117 trillion won (978.9 billion U.S. dollars), breaking the daily record high.

The rally was led by foreign investors who net purchased Korean stocks worth 544.6 billion won (477.3 million dollars), the largest amount since Nov. 12.

Due to the burden from the index`s rise, individual investors sold stocks worth 120.5 billion won and institutional investors also net sold 157.4 billion won (137.9 million dollars) due to the aftereffects of fund repurchases.

Accumulated net purchases by foreign investors increased to 19.97 trillion won (17.5 billion dollars) this year.

Cho Seong-jun, a researcher at NH Investment Securities, said, “As the U.S. announced a plan to extend tax cuts and upgraded its economic growth prospects, expectations of higher corporate performance are being reflected in the stock market.”

“Another favorable factor is abating fears over a fiscal crisis in southern Europe, which had a negative effect on the global financial market, and China’s austerity policies.”

Though the KOSPI topped the 2,000 mark, a phenomenon in which select shares rise is being repeated. Samsung Electronics, whose value has shot up recently, dropped 0.11 percent from the previous day, but Hyundai Heavy Industries rose 8.4 percent thanks to news that the shipbuilder received an order from a German container ship maker.

Time will tell, however, if the era of the 2,000 mark is here to stay since the index can drop if unforeseen unfavorable factors arise, experts said.

After China’s sixth hike of its reserve requirement ratio for banks this year, major stocks markets in Asia rallied simultaneously.

Japan’s benchmark Nikkei index rose 0.14 percent, China’s benchmark Shanghai Composite Index inched up 0.05 percent, and Hong Kong’s Hang Seng index grew 0.53 percent.

The U.S. Dow Jones Industrial Average also climbed 0.16 percent Monday.

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