South Korean stocks reach new high amid tax policy shift
South Korean stocks hit a fresh record high on Monday, extending their winning streak to a 10th consecutive session, as investors welcomed the government's decision to cancel a planned capital gains tax increase.
Meanwhile, the local currency traded lower against the U.S. dollar, News.Az reports, citing Yonhap.
The benchmark Korea Composite Stock Price Index (KOSPI) rose 11.77 points, or 0.35 percent, to close at 3,407.31, surpassing the previous all-time high of 3,395.54 set on Friday.
Trade volume was moderate at 374.97 million shares worth 12.53 trillion won (US$9.02 billion), with winners outnumbering losers 482 to 397.
Foreigners bought a net 266.89 billion won worth of shares, while retail and institutional investors sold 136.82 billion won and 138.24 billion won for profit taking.
Investor sentiment was buoyed by the news that the government decided to keep the capital gains tax threshold for stock holdings at 5 billion won, reversing an earlier plan to lower it to 1 billion won amid concerns it would undermine the market.
Eyes are also on the Federal Reserve's rate-setting meeting this week, where it is expected to cut interest rates amid a cooling labor market.
"Short-term volatility is expected following the recent rallies, but the relatively low level of foreign ownership compared with the past average provides a basis for further foreign buying," said Kim Jae-seung, an expert from Hyundai Motor Securities.
Top-cap shares traded mixed.
Market bellwether Samsung Electronics surged 1.46 percent to 76,500 won, and its chipmaking rival SK hynix climbed 0.76 percent to 331,000 won.
Major bio company Samsung Biologics added 0.19 percent to 1,040,000 won, while leading battery maker LG Energy Solution remained unchanged at 355,500 won. Major chemical firm LG Chem soared 1.21 percent to 293,500 won.
Defense powerhouse Hanwha Aerospace sank 1.6 percent to 986,000 won, but No. 1 financial firm KB Financial Group went up 0.25 percent to 119,600 won.
Carmakers drifted lower. Top automaker Hyundai Motor sank 3.8 percent to 215,000 won, and Kia dipped 3.97 percent to 101,700 won.
Power plant manufacturer Doosan Enerbility dropped 3.61 percent to 58,800 won, while No. 1 steelmaker POSCO Holdings remained flat at 285,000 won.
Major shipbuilder HD Hyundai Heavy lost 2.25 percent to 498,500 won, and Hanwha Ocean tumbled 3.27 percent to 109,500 won.
The local currency was quoted at 1,389.0 won against the U.S. dollar at 3:30 p.m., down 0.8 won from the previous session.
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