South Korea’s tech-heavy Kosdaq rose above 1,000 points Tuesday for the first time in 20 years, before wiping out earlier gains in the afternoon.
The secondary index inched up as much as 8.10 points to 1,007.40 points in the morning, for the first time since Sept. 14, 2000, then turned negative to close at 994.00 points, 0.53 percent lower than the previous day.
The Kosdaq began at 1,000 points on July 1, 1996 and rose as high as 2834.40 points on March 10, 2000 before plummeting to 992.50 points on Sept. 15, 2000. It fell as low as 200 points in 2008 in the midst of the global financial crisis.
An electronic signboard in the dealing room of Hana Bank in Seoul shows the tech-laden Kosdaq having risen 4.80 points, or 0.48 percent, to an intraday high of 1,004.10 on Jan. 26, 2021, surpassing the 1,000 mark for the first time since Sept. 15, 2000. (Yonhap)
The excitement in the Kosdaq in early trading came one day after the benchmark Kospi closed at 3,208.99 points, up 2.18 percent, rising above 3,200 points for the first time, and US stocks finished at record highs on Monday. The tech-focused Nasdaq increased 92.93 points, or 0.7 percent, to 13,635.99 points on Monday.
The biggest gainers on the Kosdaq on Tuesday were semiconductors, with iA and SFA Semicon each soaring by the daily limit of 30 percent.
Individual investors, who took up 88 percent of the total daily transactions on average in the past year, continued to buoyed the market on Tuesday. Retail investors bought a net 414.7 billion won ($374 million) Tuesday, while foreign and institutional investors sold a net 210.5 billion won and 166.4 billion won, respectively.
Explosive participation by retail investors which headed to big companies this year, might shift to small and medium companies on the Kosdaq markets, according to a report by KTB Investment and Securities written by analysts Kim Jae-yun and Kim Young-jun.
While the Kospi jumped almost 9 percent to 3,208.99 points on Monday from 2,944.45 points on Jan. 4, the Kosdaq only rose 2.2 percent during the same period.
“Since the Kospi grew faster than Kosdaq, it might be possible that retail moves to small and medium stocks,” the KTB analysts said, adding that participation by pension funds on the Kosdaq markets as well resumption of short selling will be the key for retail investors to remain on the Kosdaq.
Meanwhile, the Kospi remained in the negative territory throughout the day on profit-taking and sellouts by institutional and foreign investors. The Kospi declined 68.68 points, or 2.14 percent, to close at 3.140.30 points Tuesday.
By Park Ga-young (firstname.lastname@example.org