Updated July. 26, 2014 01:52
Korean stock market set a new annual record high on July 25, exceeding the threshold of 2,030 points. On the previous day, new economy team led by Choi Kyung-hwan, new Finance Minister and Deputy Prime Minister for Economic Affairs, released an economic stimulus plan to invest 41 trillion KRW to boost the sluggish domestic economy and to reform the tax system pushing companies to pay higher dividends. Analysts say the stock market produced positive response to the economy teams plan.
The benchmark index KOSPI finished at 2,033.85 points rising by 7.23 points (0.36%) on the same day, which is higher by 4.92 points than the previous annual record-high 2,028.93 points at the close on July 22. KOSPI rose to 2,036.20 at one point during the trading session, renewing the highest point in the year.
Individual investors net sold 148.5 billion KRW, but foreign and institutional investors purchased 63.9 billion and 76.6 billion KRW, pushing KOSPI above the 2,030 level. Foreign investors continued net purchase for 10 consecutive trading days. KOSDAQ rose by 3.11 points (0.56%) from the previous day, finishing at 562.78.
Per industry, steel/metal and stock trading rose by 1.84% and 1.82% respectively, showing bullish trends. Stocks in the construction (+1.17%), logistics (+1.11%), non-ferrous metal (+1.08%), and bank (+1.06%) sectors increased more than 1 percent. On the contrary, electricity and gas (-0.73%), medical equipment and precision machines (-0.66%), communication (-0.54%), paper and wood materials (-0.29%), and electricity and electronics (-0.17) saw their share prices fall at the close.
So far, institutional investors had been selling the Korean stocks to realize profit whenever KOSPI gained momentum to escape the box pattern. This time, institutional investors made a great contribution to boost the stock market by making continuous purchase along with foreign investors. Institutional investors turned to net purchase in 19 trading days since June 30.