(LEAD) Seoul shares climb to record high on tax policy hopes
SEOUL, Sept. 10 (Yonhap) -- South Korean stocks surged to an all-time high Wednesday, extending their winning streak to a seventh consecutive session on hopes that President Lee Jae Myung may reverse a controversial capital gains tax hike proposal. The local currency rose against the U.S. dollar.
The benchmark Korea Composite Stock Price Index (KOSPI) added 54.48 points, or 1.67 percent, to close at 3,314.53, surpassing the previous record high 3,305.21 set on July 6, 2021.
Earlier in the day, the KOSPI also briefly surged to 3,317.77 at 2:23 p.m., breaking the previous intraday record high of 3,305.21, set on June 25, 2021.
Total market capitalization stood at 2,727 trillion won, also the largest-ever.
So far, the KOSPI has gained 38 percent, the best performer among the Group of 20 countries. In September alone, the index also rose 4 percent through Wednesday.
Trade volume was moderate at 486.59 million shares worth 13.6 trillion won (US$9.8 billion), with winners beating losers 635 to 243.
Foreign and institutional investors bought a net 1.38 trillion won and 904.44 billion won worth of shares, respectively, while retail investors alone sold a net 2.25 trillion won.
The index opened slightly higher, tracking overnight gains on Wall Street, and further extended gains.
U.S. stocks gathered ground on Tuesday as weak jobs data bolstered bets that the Fed would cut interest rates at its policy meeting next week. The Dow Jones Industrial Average rose 0.43 percent, and the tech-heavy Nasdaq composite gained 0.37 percent. The S&P 500 index went up 0.27 percent.
Investor sentiment in Seoul was boosted by speculation that Lee may withdraw a proposal to lower the capital gains tax threshold for stock investments, a key part of his "KOSPI 5,000" initiative.
Lee is expected to outline his position on the capital gains tax reforms during a press conference Thursday, marking the 100th day since his inauguration. The proposal aims to reduce the threshold for being classified as a "large shareholder" from 5 billion won to 1 billion won.
"The policy-driven backdrop behind the KOSPI's record-breaking rally stems from growing expectations over a revised tax reform plan," said Han Ji-young, an analyst at Kiwoom Securities Co.
Tech shares led the overall market advance.
Market bellwether Samsung Electronics rose 1.54 percent to 72,600 won, and chip giant SK hynix surged 5.56 percent to 304,000 won to continue a seven-session winning streak.
Meanwhile, major battery maker LG Energy Solution lost 1.87 percent to 340,500 won on profit-taking.
Top automaker Hyundai Motor added 0.68 percent to 220,500 won, and its sister Kia grew 0.47 percent to 106,000 won.
Nuclear power plant manufacturer Doosan Enerbility climbed 0.64 percent to 62,600 won, and top financial firm KB Financial jumped 7.01 percent to 117,600 won.
Bio shares ended mixed. Leading pharmaceutical firm Samsung Biologics went down 0.67 percent to 1.03 million won, while Celltrion edged up 0.12 percent to 169,700 won.
The local currency was quoted at 1,387.2 won against the greenback at 3:30 p.m., up 0.7 won from the previous session.
Bond prices, which move inversely to yields, closed mixed. The yield on three-year Treasurys added 0.5 basis point to 2.43 percent, while the return on the benchmark five-year government bonds declined 1.6 basis points to 2.566 percent.
khj@yna.co.kr
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