KOSPI Soars Above 2,000 Points
The KOSPI jumped past 2,000 points for the first time in 37 months on Tuesday, closing up 12.46 points or 0.62 percent at 2,009.05. The main index has more than doubled in less than two years and two months after plummeting to 892 points in intraday trading on Oct. 27, 2008 at the height of the global financial crisis. Tuesday's close was the highest since Nov. 7, 2007, when the global economy was booming and investors were lining up to park their cash in equity-linked funds, and some 50 points shy of the record of 2,064.85 on Oct. 31, 2007. Market capitalization, which indicates the size of the bourse, hit a record high on Tuesday at W1,117.3 trillion (US$1=W1,141).
Yet sentiment in domestic brokerages was not as upbeat. Foreign investors were largely responsible for the latest bull run. Advanced countries, including the U.S. and the European Union, have drastically increased liquidity to overcome the financial crisis, and this money has flown to Asia, which has been less affected by the financial meltdown. Foreign investors net bought W53 trillion worth of Korean shares since 2009 and W550 billion on Tuesday. Most analysts forecast the KOSPI will rise even higher since the global economy is overflowing with capital, while globally-competitive Korean companies are emerging with vastly improved earnings results. But there are concerns that the South European fiscal mess, fiscal tightening by China and the lackluster pace of U.S. economic recovery could slam on the brakes.
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