| An electronic board in the dealing room of Hana Bank's headquarters in Seoul shows Korea's main bourse, the KOSPI, at 3,025.24 points during intra-day trading. It closed at 3,001.80, up 10.08 points from the previous day's session. Yonhap |
By Yi Whan-woo
The benchmark KOSPI and junior Kosdaq markets slightly recovered Wednesday, with the indexes finishing over the symbolic thresholds of 3,000 points and 1,000 points, respectively.
Wednesday's recovery was a reflection of Wall Street's performances overnight there, in which all the major indexes responded positively to the remarks by top U.S. physician-scientist and Chief Medical Advisor to the President Anthony Fauci. Fauci suggested that the Omicron variant of the coronavirus isn't worse than prior strains and is possibly milder.
The local currency market, which has recently seen higher volatility because of the rapid spread of the Omicron variant, also showed signs of stability, with the won-dollar exchange rate settling into the 1,170 range for two consecutive days prior to Wednesday's closing, after days of the won losing luster against the dollar.
The exchange rate had once expected to surpass 1,200 won per dollar in late November, when the Omicron variant first emerged, and prompted fears that it will cause major economic damage.
The Korean currency closed at 1,176.40 won per dollar, Wednesday, down 2.60 won from the previous session's close. The exchange rate has mostly hovered around 1,180 won to 1,190 won for the past month.
“Uncertainties surrounding the Omicron variant and U.S. politics are waning, pushing U.S. stocks to rise and accordingly helping the market here to take charge,” Kiwoom Securities analyst Han Ji-young said.
“The possible trend of a strengthening won can be said to be contributing to a favorable stock market compared to during the last month,” the analyst said, adding that it will be especially crucial to see the market's bellwethers rebound.
The KOSPI saw a quite bullish start, rising 25.52 points, or 0.85 percent, to trade at 3,017.24 in the first 30 minutes of trading. It closed at 3,001.80, up 10.08 points from Tuesday's session.
While stocks extended their gains for the sixth straight session, Wednesday was the first time since Nov. 22 that the main bourse closed above the 3,000-point mark. Among the visible advancers, Samsung SDI jumped 2.75 percent and Naver moved up 1.02 percent, data by the Korea Exchange (KRX) showed.
The junior, tech-heavy Kosdaq performed well, too, moving up 12.85 points, or 1.29 percent, to trade at 1,009.45 in the first 30 minutes of trading. It closed at 1,006.04, breaking the 1,000-point mark for the first time since Nov. 26.
Behind Wednesday's defensive performance were investors' positive reactions to Fauci's comments, said stock market analysts.
Fauci's remarks emboldened investors to take a “risk-on mentality,” as seen from the Dow Jones Industrial Average rising 1.4 percent to end at 35,719.43, the SP 500 gaining 2.07 percent to close at 4,686.75, and the Nasdaq Composite advancing 3.03 percent to end at 7,339.90.
The FTSE 100 in London gained 1.5 percent, closing at 7,339.9, the DAX in Frankfurt, Germany climbed 2.8 percent to end at 15,813.94 and the CAC 40 in Paris advanced 2.9 percent to close at 7,065.39.
But some industry sources are saying that it is too early to say that the local stock markets are back on track toward stabilization. They said that the record number of COVID-19 infection cases reaching above 7,000 on Wednesday may affect investment sentiment.
They also noted that Fauci warned of over-interpreting the data concerning the less-than-expected severity of the Omicron variant. Fauci pointed out that the populations being followed in the data skewed toward the young, who were less likely to require COVID-19-related hospitalization.