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GDP growth report fuels market rally

Apr 28,2017
The Korean stock market continued its rally into a sixth day, with indicators like first-quarter GDP growth suggesting a rosy outlook for the year.

The benchmark index, the Kopsi, closed at 2,209.46, up 1.62 points or 0.07 percent from the previous trading day, to reach a level not seen in nearly six years.

“The global market seems to be taking a breather after recent gains,” said Hong Choon-wook, an analyst at Kiwoom Securities. “Improved earnings and economic data, however, will help the local stock market stay on an upward course.”

Earlier in the day, the Bank of Korea announced the Korean economy grew 2.7 percent during the first quarter compared to last year. Foreign and retail investors were giddy about the news, scooping up local shares worth 10.0 billion won ($8.8 million) and 154.7 billion won each. Institutional investors, though, were less trigger-happy, offloading 162.9 billion won in stocks.

Samsung Electronics, the country’s most valuable company, jumped 2.43 percent to close at a record 2,192,000 won. During the trading session, the tech giant’s share price soared as high as 2,226,000 won after it posted plump first-quarter profit.

The conglomerate also said it would not convert to a holding company structure but instead buy back 9.3 trillion won in stock this year and cancel its treasury stock worth 49 trillion won down the road. Samsung C&T, the de facto holding company of Samsung, plunged 6.84 percent to 122,500 won after the plan to adopt a holding company structure was called off.

Hyundai Motor slipped 2.65 percent to 147,000 won and affiliate Kia Motors dropped 2.51 percent to 35,000 won after Kia announced its first-quarter profit fell compared to last year. Auto parts supplier Hyundai Mobis went down with them, falling 1.30 percent to 227,000 won.

The secondary Kosdaq slipped for the first time in three days, down 4 points or 0.63 percent from the previous trading session, to 631.11. The Korean won closed at 1,130.10 won against the U.S. dollar, down 5 won from the previous trading day.

The yield on three-year and 10-year government bonds fell 1 basis point each to 1.67 and 2.20 percent.

BY CHOI HYUNG-JO, YONHAP [choi.hyungjo@joongang.co.kr]