Seoul shares edge up toward 2,300 points

Korean stocks managed to rally toward 2,300 points on Monday, despite net sales by foreign investors.

The benchmark KOSPI closed at 2,290.65, up 0.2 percent. The stock market was able to extend gains due to equity purchase by retail and institutional investors.

Foreign investors unloaded stocks worth 123 billion won.

Foreigners have invested some 7.2 trillion won in Korean stocks since this January, according to Hana Financial Investment.

The latest rally is in part due to growing expectations for the Moon Jae-in government, which has cleared uncertainty stemming from ousted former President Park Geun-hye.

Also, better-than-expected corporate earnings have boosted Seoul stocks.

“Local stocks could rally further driven by a rebound in global demand, which will improve earnings of Korean exporters,” said Kim Yong-gu, an analyst at Hana Financial.

Seo Bo-ick, an analyst at Eugene Investment & Securities also agreed, “Stocks could extend their rally in the latter half of this year as corporate earnings improve.”

Samsung Electronics, the biggest blue chip, led the rally again. More than 50 percent of its shares are held by foreign investors.

Samsung Electronics closed up 0.61 percent at 2,305,000 won.

Its market cap surpassed 322 trillion won as its business outlook especially for semiconductors remain rosy.

The tech giant posted an operating profit of nearly 10 trillion won on robust sales of chips in the first quarter of this year.

Korea achieved stellar exports in recent months led by chips and displays.

Samsung Electronics also led the rally of the KOSPI200 index, which is heading toward 300 points.

The index, which tracks the most liquid stocks on the KOSPI, closed at 298.87, up 0.62 percent.

However, the stock market could face volatility next month when the U.S. Federal Reserve is expected to raise its interest rate and the MSCI will review whether to include Korea on its developed market index, analysts say.

The MSCI will also review whether to include Chinese A shares on its emerging market index next month.