KOSPI Reclaims 2,000-level Largely Due To Foreign Buying

Bubbles everywhere. Again, the U.S. easy monetary policy prevails.

From Yonhap News:

South Korea's key stock index again reached the 2,000-point milestone on strong foreign buying on Tuesday, prompting analysts to predict it will advance further and hit an all-time high in the coming year.

The benchmark Korea Composite Stock Price Index (KOSPI) advanced 12.46 points to finish at 2,009.05, rising 0.62 percent from the previous session and closing above the 2,000 mark for the first time since late 2007.

The market turnaround came after the KOSPI peaked at an all-time high of 2,064.85 on Oct. 31, 2007 only to fall back below the 1,000 point the next year as the global financial crisis, triggered by the collapse of Lehman Brothers, wreaked havoc on the world and local financial markets.

The recent market rally is widely attributed to continued stock buying by foreign investors who are betting on emerging economies that have pulled out of the global crisis at a faster pace than their advanced peers.

Overseas investors have bought a net 19.4 trillion won (US$17 billion) of KOSPI shares so far this year with institutional and retail investors selling a net 10.5 trillion won and 5.3 trillion won each, according to the bourse operator Korea Exchange.

Analysts said the local currency's uptrend has helped boost the allure of local stocks for foreigners since the value of won-denominated share holdings climbs as the Korean currency ascends against the U.S. dollar and other major global currencies.

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