Seoul shares spike 1.32% on hopes for oil price rebound

Korean shares jumped 1.32 percent on Thursday as investors cheered major oil exporters' efforts to stabilize crude prices, analysts said. The local currency edged down against the U.S. dollar, hitting a new yearly low.

The benchmark Korea Composite Stock Price Index (KOSPI) gained 24.9 points to close at 1,908.84. Trading volume was moderate at 327 million shares worth 4.64 trillion won ($3.78 billion), with gainers far outnumbering losers 666 to 170.

It marked the first time in more than a week for the index to finish above the 1,900-point level.

Analysts said the sharp gains on the Seoul bourse are attributable to the signs of eased uncertainties over global oil prices, which have been cited as a major burden on Asian stock markets.

Earlier this week, major oil producers, including Saudi Arabia and Iran, vowed to freeze their supply in a bid to stabilize falling prices.

"Although the countries failed to reduce the production, it is positive that at least such producers reached a common ground," said Cho Byung-hyun, an analyst at Yuanta Securities.

He said oil prices play one of the key roles in the local stock market, adding that an increase in the seasonal demand for oil may also lend support to the stabilization of the prices.

The eased concerns over a possible rate hike in the United States for March following the release of the Federal Open Market Committee's January minutes also contributed to the market advance, analysts added.

Foreign investors purchased a net 92.4 billion won, while individuals sold a net 301.5 billion won. Institutions bought more shares than they sold at 129.5 billion won.

Oil refineries closed bullish, with No. 1 SK Innovation advancing 2.17 percent to 204,500 won and S Oil moving up 1.83 percent to 77,900 won.

Tech shares closed higher, with top tech firm Samsung Electronics moving up 0.17 percent to 1,187,000 won and No. 2 player LG Electronics advancing 1.17 percent to 60,300 won. Flat panel maker LG Display increased 2.97 percent to 22,500 won.

Steelmakers were also winners, with No. 1 POSCO adding 2.61 percent to 196,500 won and Korea Zinc rising 3.74 percent to 457,500 won. Hyundai Steel climbed 2.48 percent to 53,800 won.

Carmakers, on the other hand, closed lower with Hyundai Motor remaining unchanged at 147,000 won and Kia Motors losing 0.42 percent to 47,650 won. Top auto parts maker Hyundai Mobis shed 0.95 percent to 259,500 won.

The local currency ended at 1,227.40 won against greenback, down 0.3 won from Wednesday's close and the lowest level since July 2, 2010. The won hit a yearly low against the dollar for the second straight session.

Dealers said the local currency lost ground, affected by growing expectations of an interest rate hike by the Bank of Korea and escalating tensions on the Korean Peninsula.

Bond prices, which move inversely to yields, closed lower. The yield on three-year Treasurys added 1.6 basis points to 1.451 percent and the return on the benchmark five-year government bonds also moved up 1.6 basis points to 1.568 percent.(Yonhap)