The KOSPI climbed 0.49 percent on Friday to close at 1,997.05 points on the last trading day of 2012.

The Korean won also gained, with the dollar ending at 1,070.6 won, down from 1,072.2 won on the previous day.

The won appreciated 7.86 percent to the greenback this year, up from 1,151.8 won per dollar at market close on the last trading day of 2011.

Buoyed by advanced economies’ quantitative easing and international agencies’ upgrade of Korea’s credit rating, the won’s appreciation accelerated, pulling down the won-dollar rate to the 1,070 won per dollar range in no time.

Starting in September, the European Central Bank, the U.S. Fed and the Bank of Japan announced measures for quantitative easing in a bid to buttress the economy and keep their currencies weak.

Increased global liquidity led to a greater inflow of funds into Korea, causing the domestic currency to gain further. The greenback fell below 1,100 won on Oct. 25 and slid under 1,080 won on Dec. 10.

The currency exchange rate, however, did not fluctuate despite unfavorable external factors such as North Korea’s long-range rocket launch on Dec. 12.

FX market analysts projected that the won will continue to strengthen next year and the won-dollar rate could go down to as low as around 1,040 won per dollar.

The benchmark KOSPI rose 9.4 percent this year, marking the 13th highest annual growth among G20 nations. The tech-heavy Kosdaq fell 0.7 percent.

Stock market uncertainties heightened this year thanks to the eurozone fiscal crisis and increased global liquidity.

The KOSPI had risen above 2,000 points early this year, but was pushed down as the eurozone crisis intensified.

Stock transaction volume increased by 37.2 percent from last year to 4.9 trillion shares due to high demand for politically-themed stocks ahead of the presidential election, but the entire transaction value dipped by 29.9 percent from 6.9 trillion won last year.

The aggregate market value surged by 106 trillion won from a year ago. Except for the electronic and electric industry, most industries’ shares in total market cap shrank.

Of the 17 KRX sector indices, 14 rose, excluding construction, autos and consumer retail.

The combined market caps of the nation’s 10 largest conglomerates gained 117 trillion from a year ago to 775 trillion won, or about 60 percent of the entire market cap. Their share last year was 55.6 percent.

By Kim So-hyun (sophie@heraldcorp.com)