Stock prices surge to close at 587.87

The KOSPI or Korea Composite Stock Price Index approached the 590 barrier again Friday and the Kosdaq index exceeded the 70 mark.

The broad-based key index surged by 26.08 points (4.64%) to close at 587.87, and the over-the-counter Kosdaq index soared by 3.85 points (5.70%) to reach 71.36.

As soon as the market opened, stock prices jumped on improved investor sentiment following smooth trading on Thursday, the index option maturity date, and the three-day rise in the Nasdaq index in the United States.

The local bourse showed a strong rally toward closing, with the key index once exceeding the 600 mark.

However, it fell by more than 10 points starting at 2:40 p.m. due to massive selling on profit taking.

In the index futures market, in particular, a side car, which suspends the effectiveness of program trading quotations for five minutes, was issued around 11:30 a.m. for the second time this year as the massive buying of foreign investors boosted futures price by 4.09%. The net purchase of futures by foreigners amounted to 135.6 billion won.

Both foreign investors and institutional investors net bought stocks worth 263.1 billion won and 82.7 billion won, respectively, accelerating the index increase.

Conversely, individual investors net sold 326.9 billion won on profit taking. All issues, excluding securities, insurance, and food & beverage shares, rose, and communication stocks led the strong rally.

A key factor behind the surge in the Kosdaq index was also the strong buying of both foreigners and institutional investors. Net purchases came to 41.4 billion won for foreign investors and 13.4 billion won for institutions. But individuals net sold stocks worth 51.7 billion won. The Kosdaq index also retreated starting at around 2:30 p.m. after surpassing the 73 marks.

Cho Jae-Hoon, head of the investment strategy team of Daewoo Securities Co., said that investors need to pay more attention, as the index tends to fluctuate sharply in the ample-liquidity market.