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| A dealer stretches in front of a monitor at a dealing room at Hana Bank headquarters in Seoul, Wednesday, as the KOSPI closed at 2,147 points, up 2.87 percent from the previous closing. / Yonhap |
By Lee Min-hyung
The nation's benchmark stock index topped the 2,100-mark for the first time in 100 days on Wednesday on hopes for a possible rebound of the pandemic-hit global economy.
The KOSPI closed at 2,147 points, up 2.87 percent from the previous trading day. The main bourse started with a gain of more than 1 percent on subsiding signs of the coronavirus pandemic.
Economists attributed the bullish run to preemptive and aggressive anti-virus pump-priming measures taken by financial authorities around the world. They said the market stimulus steps started to show results and revived investor confidence here and abroad.
"Governments across the world have taken bold steps and expanded liquidity in the markets, which has offset concerns over corporate earnings and improved investor sentiment," Meritz Securities economist Kang Bong-joo said.
The brokerages firm expected the main bourse to top the 2,200-mark in the latter half of 2020 under the best-case scenario where major market players achieve a meaningful earnings rebound in the third and fourth quarter.
The KOSPI is expected to fluctuate within a trading band of 1,800 to 2,250 in the second half of the year.
"But the index may plunge to around 1,800 points in the worst-case scenario under which the net profit forecast of KOSPI-listed firms in 2021 is revised down over 10 trillion won ($8.21 billion)," he said.
Riding on the upward momentum of the stock market, Samsung Electronics, the nation's largest company by market capitalization, also went on a bullish run on Wednesday, after months of sluggish growth due to the pandemic shock.
Shares of the company were traded at 55,000 won as of 2:15 p.m., up 7 percent from a day earlier. This was the highest since March 6 when its stock price came in at around 57,000 won.
But with the pandemic sweeping across the globe, the company failed to make a meaningful rebound in its stock valuation.
Shares of SK hynix, another KOSPI-leading stock and the second-largest firm here, were also on the rise. The company was traded at as high as 89,200 won at one point one Wednesday, the highest price since early March.
The two chipmakers have undergone tough months since March, as foreign investors engaged in mass selling of the stocks amid fears of the global pandemic spread.
Daishin Securities analyst Lee Kyoung-min also expected the KOSPI to continue gaining momentum for recovery throughout the year due to hopes for a global economic rebound.
But the economist also noted investors should keep in mind lingering external uncertainties surrounding escalating political tension between the United States and China.
A political tug-of-war is brewing between the world's two largest-economies. The latest in a series of conflicts arose from China's legislature approval of plans to impose a security law on Hong Kong. This has caused backlash from U.S. President Donald Trump who threatened to revoke Hong Kong's special trade status with the U.S.
"Concerns remain in place on the short-term over-valuation of the KOSPI, and the external uncertainties are also amplifying," the analyst said.
"Investor sentiment may shrink (at this period of external uncertainties), so investors are advised to take a close look at economic indices in May and June to figure out whether the real economy is on track for recovery."
