KOSPI HITS ALL-TIME HIGH

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The nation's benchmark KOSPI rose nearly two percent and closed at an all-time high of over 2,600 points. We look into the reason behind the rally, that comes despite concerns over re-surging COVID-19 infections and the government's decision to toughen social distancing rules.

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A buying spree from foreign investors is being attributed to the latest rally. Since the KOSPI began climbing early this month, foreigners have purchased Korean stocks everyday except one. There are five more trading days left before the end of this month. But foreigners already net bought more than 6.4 trillion won - the second largest monthly purchase.

[Soundbite] HWANG SE-WOON(KOREA CAPITAL MARKET INSTITUTE) : "A foreign capital inflow increased and stock prices rose overall due to expectations for a drop in the foreign exchange rate, an economic recovery, bullish exports and greater business performance."

Shortly after the coronavirus pandemic broke out, the stock market was buoyed by individuals' investments in the bio industry and businesses that don't require in-person contact. In the second half, steel, semiconductors and battery stocks rose, as foreign investors mainly purchased shares of export-driven companies. During the first 20 days of this month, the nation's exports showed signs of recovery on the back of an over eleven percent growth in shipments of chips and mobile phones.

[Soundbite] PARK SANG-HYUN(HI INVESTMENT & SECURITIES) : "The nation's exports serve as a barometer for a global economic situation. In that context, foreigners' buying spree of local stocks indicate an economic recovery."

As foreigners have increased investments in the local stock market for its relatively strong performance, the KOSPI has posted the second highest growth among G20 nations this year. However, market uncertainties remain, such as re-surging COVID-19 infections at home and abroad as well as the prolonged production and distribution of a vaccine.