Seoul stocks extend New Year rally to fresh record

An electronic board at a Hana Bank dealing room in Seoul shows the Kospi at 4,652.54 on Monday, marking a new all-time intraday high. (Yonhap)

Seoul stocks on Monday climbed to another record, extending a rally that has carried into the new year.

The benchmark Kospi ended the session at 4,624.79, up 0.84 percent, marking its seventh consecutive record close and extending the streak that has persisted since the start of the year.

The index also set a new intraday high. It opened at 4,639.89, up 53.57 points, or 1.2 percent, its highest opening on record, and climbed to an intraday peak of 4,652.54, surpassing the previous all-time high of 4,622.32 set on Thursday before paring gains into the close.

Monday's rally was driven by institutional investors, who finished the day as the sole net buyers with purchases of 210 billion won ($143 million). Retail investors, who had been net buyers earlier in the day, shifted to selling as momentum weakened, ending the session with net sales of around 100 billion won.

Foreign investors stepped up selling for a third straight session, offloading about 350 billion won worth of Kospi shares on Monday.

Gains were mixed among heavyweights. Battery maker LG Energy Solution and energy firm Doosan Enerbility each surged more than 4 percent, ranking among the top performers. Chipmakers Samsung Electronics and SK hynix, which had led the recent rally, were largely flat, while HD Hyundai Heavy Industries and Samsung Biologics each slipped around 1 percent.

Foreign investors' shift to net selling has begun to slow the Kospi’s New Year rally. After fueling successive record highs with cumulative net purchases of 3.3 trillion won through Thursday, they switched to sellers, beginning to weigh on sentiment. The index failed to set a new intraday high on Friday, but late buying by retail investors still carried it to a record close.

Experts say the government’s 5,000 target may be closer than expected. Lee Kyoung-min, a senior analyst at Daishin Securities, said the Kospi could reach the level as early as February.

“The 12-month forward earnings per share have risen to 457.3 points from 403.8 points in mid-December, driven by stronger and faster-than-expected earnings upgrades,” Lee said. “This has increased the possibility for the Kospi to enter the 5,000 range in the first quarter.”

The renewed weakness in the local currency remains a risk. The Korean won opened onshore trading Monday at 1,461.3 per US dollar, down 3.7 won from the previous session, returning above the 1,460 level for the first time since Dec. 24, when authorities issued a strong verbal warning. Though the intervention had strengthened the currency back to 1,450, it has since weakened steadily into the new year.

By the stock market close, the won was trading near 1,470 against the greenback.

Korea’s secondary index, Kosdaq, ended the session at 949.81, up 0.2 percent. The index opened largely flat at 948.98, briefly climbed to an intraday high of 957.37, then eased back toward the 950 level in afternoon trading.