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Earnings outlook sends Kospi to record

July 12,2017
Seoul’s main bourse reached a record high Tuesday on the back of positive earnings outlooks at major Korean tech companies.

The benchmark Kospi rose 13.90 points, or 0.58 percent from the previous trading day, to close at 2,396.00. Foreign investors were the main buyers, scooping up 100.9 billion won ($87.6 million). Institutions sold 20.2 billion won, and retail investors offloaded 123.8 billion won worth of Korean stocks.

Analysts said investor sentiment on IT shares improved after Samsung Electronics, the market’s top cap, announced a record-breaking performance estimate for the second quarter. “The combined operating profit of companies listed on the Kospi is expected to reach 195 trillion won this year,” said Kim Ji-won, a researcher at KB Securities. “The earnings momentum will continue through the third quarter.”

Kim noted the outlook for chips, IT and construction shares is especially favorable.

Large-cap shares increased 0.7 percent across the board on Tuesday. By sector, securities went up 3.1 percent, and energy and chemical shares gained 1.6 percent.

Market heavyweight Samsung Electronics climbed to a record high with the Kospi, up 0.70 percent to close at 2,450,000 won. Rival chipmaker SK Hynix jumped 2.53 percent to 69,000 won, and portal giant Naver gained 2.09 percent to end at 830,000 won.

Top steelmaker Posco strengthened 2.67 percent to 308,000 won, led by a positive earnings projection for the second half. It was the first time in two years and six months that Posco’s share price closed above 300,000.

Auto companies were mixed across the board. Parts maker Hyundai Mobis and Korea’s second-largest automaker, Kia Motors, each inched up 0.21 percent and 0.27 percent to 243,500 won and 36,800 won. The top car company, Hyundai Motor, remained fixed at 148,000 won.

The secondary index, the Kosdaq, edged down 1.85 points, or 0.28 percent, to end the day at 656.01. The local currency closed at 1,151.10 won against the U.S. dollar, down 1.6 won from the previous session’s close.

Bond prices, which move inversely to yields, closed mixed. The yield on three-year government bonds moved up one basis point to 1.76 percent, and the return on 10-year bonds fell one basis point to 1.96 percent.

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