Seoul: Stocks hit record high on strong earnings bets, won slips after Fed

[SEOUL] South Korean shares firmed to a record high on Thursday on upbeat forecasts for second-quarter corporate earnings while hopes a new South Korean president would provide economic stimulus supported sentiment.

The Korea Composite Stock Price Index (Kospi) was up 0.6 per cent at 2,233.63 points as of 0221 GMT. Earlier in the session, it hit an all-time high of 2,234.38.

Stoking demand are high expectations a new South Korean leader will boost spending to support economic growth, which would be positive for corporates. South Koreans head to the polls to vote for a new president on May 9.

"Market participants' expectations for stronger South Korean economy are high as all of the candidates have promised to boost domestic demand," said Song Seung-yeon, a stock analyst at Korea Investment & Securities.

Song expects strong exports to support corporate earnings in the second quarter. She added the index would soon reach as high as 2,350 points, possibly later in the first half or early part of the second half of this year.

"The Kospi may retreat from then on as the US Federal Reserve seems likely to raise rates in its coming policy meetings," added Song.

Offshore investors were set to be net buyers, purchasing 156.6 billion Korean won (S$193 million) worth of Kospi shares near mid-session.

Market heavyweight Samsung Electronics was up 1.2 per cent, set for an eighth straight session of gains.

Shares of Amorepacific gained nearly 4 per cent.

Advancing issues outnumbered declining ones by 488 to 282.

The South Korean won was weaker after the US Federal Reserve kept rates unchanged at its May policy meeting but downplayed recent economic weakness, a sign it was still on track for two more rate rises this year.

The won stood at 1,132.4 to the US dollar, down 0.2 per cent compared to the previous close of 1,130.5.

June futures on three-year treasury bonds shed 0.01 point to 109.37, after sagging in early trade due to high demand for equities.

REUTERS