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| gettyimagesbank |
By Anna J. Park
Korea's main benchmark, the KOSPI, is reversing last year's bearish performance, as it continues its upward trend since the start of the new year.
According to the Korea Exchange (KRX), the KOSPI index rose by 6.69 percent during the first two weeks of January, putting it at eighth among the G-20 countries' main benchmark bourse operators for the same period. The main benchmark's increase rate this year has exceeded that of other major countries, including the U.S., Japan and China.
Argentina's MERVAL index ranked first with an increase rate of 19.83 percent during the first two weeks of this year, followed by Mexico's IPC index at 10.55 percent. Euro markets also showed strong upward moves, with EURO STOXX5 50, Italy's FTSEMIB, France's CAC40 and Germany's DAX30 following down the list.
The KOSPI's bullish movements this year contrasts with its poor performance throughout last year, during which it fell by 24.89 percent annually. Due to its downward movements last year, the KOSPI ranked second to last among the G-20 countries' main stock market indices, only defeating Russia's key market index. Considering that Russia invaded Ukraine early last year and was at war with the country, Korea's stock market had effectively the worst performance among the major countries last year.
The completely different bullish atmosphere of the Korean stock market this month is attributed to expectations over China's reopening as well as the weaker dollar. Both factors have led foreign investors to return to key export-driven stock items, resulting in soaring prices for major semiconductors and secondary batteries, which comprise of about one-fifth of the KOSPI's total market cap. Samsung Electronics' stock price rose by 9.9 percent during the first two weeks of this month, while SK hynix, another major global chip maker, also saw its stock price soar by 14.3 percent during the period.
"Market watchers thought that the current phase could be the bottom, after Samsung Electronics posted an earning shock for the fourth quarter last year. It means that the market will likely make a rebound after hitting the bottom," Park Sang-hyun, an economist at HI Investment & Securities, said.
Growth stocks, including those of IT-based big tech firms like Naver and Kakao, have also been rallying, leading the KOSPI index's gains, nearing the 2,400-point mark. After the KOSPI ended with 2,236.40 points at the end of last year, it finished with 2,399.86 on Monday's closing.
Stabilized energy prices, such as natural gas, are also contributing to market expectations that Korean corporations could rake in more profits this year.
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