The Korean composite stock price index (Kospi) would likely end May in an uninterrupted winning streak for half a year, a rare event that openly happened four times since its humble beginning at 100 in January 1980.

The Kospi finished Monday 0.10 percent lower for the first time in seven trading days at 2,352.97. The main index has gained 6.7 percent this month alone, outperforming other global indices - the U.S. Dow Jones index that gained 0.7 percent, the U.K. FTSE 100 index 4.8 percent, the Taiwan Capitalization Weighted Stock index 2.33 percent and Germany’s DAX 30 index 1.32 percent.

If it finishes Wednesday higher, it would have been in an uptrend sixth straight month.

As of 1:25 p.m. on Tuesday, the benchmark index was down 0.4 percent at 2,343.64

According to Cape Investment & Securities, the Kospi rally had been kept that long only four times in its 37-year history.

It gained as much as 70.64 percent from February 1986 as the export-led economy benefited from three lows - low oil prices, interest rates, and U.S. dollar - following the 1985 Plaza Accord that artificially inflated the yen to devalue the dollar.

Between October 2001 and March 2002, the main market surged 86.7 percent as the global markets started rally after a brief crash in the wake of terrorist attacks on September 11, 2001. The Kospi rose 42 percent from February to July 2007 right before the global financial crisis triggered by U.S. subprime mortgage crisis.

“When excluding the speculative rallies in 2001 and 2007 on volatility from uncertainties, a genuine rally this long would have happened in more than three decades,” said Ji Ki-ho, head of a research team at Cape Investment & Securities.

The gain - 19 percent - would not be as big as in the past, but nevertheless meaningful as it had not gone through a correction, he said.

The bull has mainly been driven by foreign investors. According to the KRX, offshore investors net bought $5.6 billion worth local stocks as of the end of April, the third highest foreign net buying in Asia after purchases of Indian stocks worth $7.1 billion and Taiwanese stocks worth $6.7 billion.

Asian markets that drew strong foreign buying were mostly strong.

Kospi gained 14.4 percent from January to the end of April, the third highest after rises of 16.7 percent in Hong Kong and 14.6 percent in the Philippines.

Expectations for strong earnings on top of heavy spending plans from the new government added appeal to Korean shares among emerging equity markets.

The combined net profit of the Kospi-listed companies is expected to reach 130 trillion won to 140 trillion won this year, sharply up from last year’s record-high of 94 trillion won ($83.7 billion). Kospi has climbed up without a breather despite concerns for overheated market because there are more upsides than downsides, said Jung Mi-young, a researcher at Samsung Futures.

By Hong Jang-won and Jung Woo-sung

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