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Korea¡¯s stock index soared by the largest margin in history on Thursday and the won rallied against the dollar on news that Korea and the U.S. signed a currency swap agreement that ends the country¡¯s liquidity crisis.
The KOSPI soared 115.75 points or 11.95 percent, from the previous day to close at 1,084.72 points, the biggest margin on record, regaining the 1,000-point level. Stocks rose 13 percent at one point during trading to 1,094 points. The tech-heavy Kosdaq also soared a record 11.47 percent or 30.46 points. Foreign investors bought some W22 billion worth of stocks.
The won strengthened sharply against the greenback in the foreign exchange market. In the Seoul foreign exchange market, the won surged W177 to the dollar, the biggest leap in 10 years and 10 months, to close at W1,250.
The rally was due in large part to a currency swap agreement signed Wednesday between Korea and the U.S. to supply up to US$30 billion in exchange for won-deposits in the U.S. Federal Reserve. Kim Seok-joong, president of Phoenix Asset, said this means the foreign currency liquidity shortage, one of the three worrying factors besides won liquidity and recession fears, has been averted.
But experts predict it will be a long time before the market stabilizes since more financial firms and businesses could go bust due to a slump in the real estate industry, sluggish domestic consumption and slow exports.
(englishnews@chosun.com )
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