THE KOREA ECONOMIC DAILY, GLOBAL EDITION

South Korea’s large-cap stocks have posted hefty gains in recent trade, driving the liquidity-driven markets higher after robust second-quarter results raised hopes of an economic recovery.

Large-cap names such as LG Household & Healthcare Co. and Hyundai Motor Co. have attracted individual investors, who used to chase small caps on the junior KOSDAQ market hoping for a jackpot.

LG Household & Healthcare leapt 9% to close at 1,573,000 won ($1,327) on August 11, outperforming the 1.34% rise in the KOSPI. The benchmark index ended at 2,418.67 in its strongest finish since June 15, 2018.

Despite the absence of upbeat news, LG Household saw foreign investors buying a net 44.1 billion won of its shares. It is rare for the cosmetics and household goods maker to see its share price rise almost 10% in a single day.

Power utility KEPCO Corp. jumped 8% on the day with no positive lead to push the stock higher. The KOSPI’s large-cap index has climbed 7.74% since the start of this month, outpacing the 7.53% rise in the broader KOSPI index and the 5.51% gain in the KOSDAQ index.

The recent rally in large-cap names reflects rotational buying from growth stocks to underperforming ones, suggesting markets have more room to rise, analysts say.

“Stock markets which had gained led by growth stocks are being balanced out led by economically-sensitive stocks,” said HI Investment & Securities’ research head Taebong Koh. “Given increasing expectations of an economic recovery, economically-sensitive stocks' performance will be bullish for the time being.”