7th May 2024 – South Korean shares closed higher on Tuesday as investor optimism grew around potential rate cuts from the U.S. Federal Reserve. The positive momentum was also influenced by strong U.S. stock performance on Monday.
The Korea Composite Stock Price Index (Kospi) rose by 57.73 points, or 2.16%, finishing at 2,734.36, while the Kosdaq increased by 5.67 points, or 0.66%, ending at 871.26. The South Korean market was closed on Monday for Children’s Day.
In economic news, South Korea’s foreign exchange reserves decreased to $413.3 billion at the end of April, down from $419.3 billion at the end of March, according to the Bank of Korea.
The country’s official forex reserves included securities valued at $370.6 billion, deposits of $18.8 billion, special drawing rights of $14.6 billion, gold worth $4.8 billion, and its IMF position at $4.4 billion. Despite the decrease, South Korea’s forex reserves remained the ninth largest globally as of the end of March.
Kumho Petrochemical, a South Korean synthetic rubber company, reported a net income attributable to shareholders of 102.54 billion won in the first quarter, a decrease of 24.9% from 136.59 billion won a year earlier.
The company’s sales were 1.667 trillion won, down 3.1% from 1.721 trillion won in the previous year. Despite the decline, Kumho Petrochemical shares rose nearly 3% at market close.
The gains in South Korean shares reflect broader investor sentiment that is optimistic about potential rate cuts by the U.S. Federal Reserve, and positive U.S. stock market movements. However, the drop in South Korea’s foreign exchange reserves and mixed corporate earnings highlight ongoing economic uncertainties. Investors will closely monitor central bank policies and corporate performance for future market direction.
These dynamic market conditions present opportunities for informed traders to capitalise on shifting investor sentiment and economic indicators.
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