Seoul shares surged past the 1,800-point mark for the first time on Monday after data last week showing tame US inflation lifted exporters, while some brokerages rose by the daily limit on hopes for a continued market rally.
The benchmark KOSPI has surged 26 percent so far in 2007, as signs of an economic recovery at home and a rally in global markets has recently sent trading volumes to their highest ever. The last time the KOSPI saw double-digit growth was in 2005, when the index ended up 54 percent for the year amid an explosion in popularity of mutual funds.
"The Korean market has more room to grow. People don't have a better place to put their money. The real estate market is facing a correction, while market interest rates are low. Money will continue to come in," said Kim Hyun-tae, a fund manager at Landmark Investment Management.
"Global markets are going crazy, but there's a reason for that since people believe we are in the middle of a Goldilocks scenario: tame inflation and good growth," he added.
The benchmark Korea Composite Stock Price Index (KOSPI) rose 1.95 percent to score a record close of 1,806.88 points, just off an all-time high of 1,807.51, its third record high in three sessions.
Exporters were among the day's leading gainers after a smaller-than-expected increase in May's core US Consumer Price Index out on Friday eased worries about inflation in South Korea's second-biggest export market.
Samsung Electronics Co Ltd rose 2.61 percent to 589,000 won, with the chip maker also tracking higher US peers following a Goldman Sachs' ratings upgrade of global bellwether Intel Corp last week.
LG.Philips LCD Co Ltd rose 1.82 percent to 44,800 won. Citigroup raised its rating on the flat-panel maker to buy from hold, citing improving operating fundamentals.
Brokerages extended their recent sharp gains as the National Assembly could approve as early as this month a new law that aims to give securities firms a bigger role in the financial sector. Soaring trading volumes are also raising the prospects of a windfall in commissions in the sector.
Samsung Securities Co rose 8.87 percent to 82,200 won, after earlier hitting its highest since July 1999. Shares in South Korea's second-most valuable brokerage jumped 18.9 percent last week. Hyundai Securities Co rose by the daily limit of 15 percent to 27,000 won, its highest level since November 1999
Among other gainers, Daewoo Shipbuilding and Marine Engineering rose 6.03 percent to 49,250 won after saying on Monday it has won a 467 billion won order to build a drill ship for an unidentified firm in the Americas.
State-run power provider Korea Electric Power Corp rose 2.96 percent to 41,800 won after the won at one point hit its highest against the dollar in more than ten days, leading to expectations for lowered fuel import costs.
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