Stock Prices Surged to Annual Record High 645

The Korea Composite Stock Price Index (KOSPI) surged to above 640 points, closing at the highest this year.

The KOSPI closed at the annual record high 645.18, up 20.62 points, which was higher than 632.05 in May 29, yesterday.

This is the highest record in 14 months since September 14, 2000, which marked 650.14 points.

The Kosdaq index also closed at 70.62. Customers` deposits were increased by 207.4 billion won from the previous day, ending at 9.5515 trillion won, the biggest amount since July last year.

The sudden rise of stock prices was due to the foreigners` net purchases amounting to 130 billion won followed by the institutions` net purchases amounting to 80 billion won. Foreigners and institutions also made net purchases in the Kosdaq market.

Analysts said that the breakthrough of 630 points was due to the better-than-expected gross domestic product (GDP) in the third quarter.

Hwang Chang-Jung, investment strategy team director of the LG Investment and Securities, said, " Gross domestic product (GDP) was better than expected, and the macroscopic condition got better. For example, various economic indices in the U.S. showed that consumers confidence has improved."

Experts also said that customers` deposits continued to increase since the perception that the South Korean stock market is being underestimated compared with other Asian nations is spreading among foreigners.

Stock index by industry also increased by more than 8 percent.

Dong-Keun Keum gold@donga.com