On expectations for the government's "KOSDAQ revitalization" policy, the KOSDAQ index closed higher. The Financial Services Commission (FSC) said it would prepare related systems, including improving conditions so that institutional funds such as the national pension can flow into the KOSDAQ market.
The KOSPI index also topped the 4,000 mark on the back of institutional buying. After Micron released strong results and U.S. stocks rose, investor sentiment improved. However, the gains were limited as foreign investors unloaded shares during the session.
The KOSDAQ index closed at 915.27, up 13.94 points (1.55%) from the previous session. After starting at 909.70, the KOSDAQ index turned lower early and slipped below 900, then suddenly expanded its gains intraday. On expectations that the government will soon release a policy to revitalize the KOSDAQ market, the index at one point topped the 920 level during the session.
At a presidential policy briefing, the Financial Services Commission (FSC) said it would review incentives and improvements to fund management evaluation standards so that institutional investors such as the national pension and KOSDAQ venture funds can actively invest in the KOSDAQ market. The plan is to channel institutionally managed, long-term money into the KOSDAQ market, where retail funds account for a large share, to enhance market stability.
Backed by government support, expectations that the KOSDAQ market could be invigorated drew in institutional and foreign money. On the day, institutions and foreigners posted net purchases of 191.2 billion won and 90.6 billion won, respectively, on the KOSDAQ market.
Buying flowed mainly into bio and robotics shares. Alteogen finished up 3.4%, while LigaChem Biosciences and ABL Bio gained 2%. Sam Chun Dang Pharm, Peptron and HLB also closed higher. Rainbow Robotics jumped 3%, and ROBOTIS surged more than 5%.
The KOSPI index closed at 4,020.55, up 26.04 points (0.65%) from the previous session. After opening at 4,055.78, the KOSPI slipped below 4,000 on foreign selling during the session, but institutions net bought 860 billion won to defend the index. After the Bank of Japan (BOJ) raised rates, the KOSPI jumped to the 4,030 level, then moved sideways between 4,020 and 4,030.
The Bank of Japan announced at its monetary policy meeting at 12 p.m. Korea time that it would raise the benchmark rate from the current 0.5% to 0.75%. It is the first increase in about 11 months and the highest level in 30 years since 1995.
Typically, a rate hike in Japan heightens concerns about unwinding the "yen carry trade," in which investors borrow yen at low rates to invest in high-yield assets, exerting downward pressure on global risk assets, including the domestic stock market. However, because this rate hike was well telegraphed to the market, a sharp appreciation of the yen did not materialize.