Foreign and institutional investors were the main buyers, while retail investors, cautious of a potential fizzle in the summer rally, took profits. The U.S. dollar slipped 3.6 won to 1,388.2 on robust foreign demand for Korean equities. Across Asia, shares tracked Wall Street’s strength on expectations of a U.S. rate cut this month.
Foreign investors snapped their net-selling streak in May and turned steady buyers, purchasing a net 2 trillion won that month, 3.08 trillion won in June, and 3.4 trillion won in July. But momentum cooled in August, with net purchases shrinking to just 5.7 billion won after the government proposed lowering the capital gains tax threshold for large shareholders.
President Lee Jae-myung’s stock-friendly remarks buoyed sentiment. At a televised press conference Thursday marking his 100th day in office, Lee signaled he was open to leaving the current tax threshold unchanged. “The stock market moves on sentiment,” he said. “The government shouldn’t necessarily push with the tax revision if it proves detrimental to the rally."
The government had planned to lower the taxable threshold for large shareholders’ capital gains to 1 billion won from the current 5 billion won. Analysts said removing uncertainty over the plan has further bolstered investor confidence, helping to sustain the bullish run till the end of the year.
“The fundamental environment surrounding global markets is not that bad, so upward momentum should continue until year-end,” said Lee Jung-hoon, analyst at Eugene Investment & Securities.
reporter
Candice Kim
candicekim1121@ajupress.com
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