South Korean stocks closed 0.93 percent higher on Wednesday as pensions and retail investors snapped up shares on hopes an increased eurozone rescue fund would help the region move closer to a debt crisis resolution, analysts said. The local currency shot up against the U.S. dollar.
After swerving in and out of negative territory, the benchmark KOSPI climbed 17.02 points to 1,855.92.
Trading volume was moderate at 336.1 million shares worth 5.7 trillion won ($5 billion), with gainers outnumbering losers 486 to 345.
“Overnight gains on Wall Street and reports on a bailout fund expansion shored up investor sentiment,” said Park Seung-jin, an analyst at Samsung Securities Co.
On Tuesday, the British newspaper The Guardian reported that Germany and France agreed to boost the European Financial Stability Facility to 2 trillion euros ($2.8 trillion).
“But gains were limited as investors’ buying slowed after a recent eight-session rally and ahead of the upcoming meeting of European financial leaders on Sunday,” Park said.
Automakers fueled the climb. Top automaker Hyundai Motor rose 1.84 percent to 221,500 won and its smaller affiliate Kia Motors gained 3.64 percent to 74,000 won.
Hankook Tire soared 7.28 percent to 44,200 won. The leading tiremaker saw its operating profit slacken in the third quarter, but analysts said the firm is expected to see a growing profit margin next year.
“Investors are now starting to shift their attention to corporate earnings as well, and exporters with rosy profit outlooks, such as automakers, are likely to benefit from that,” said Shinyoung Securities Co. analyst Lee Kyung-soo.
Leading airline Korean Air added 2.68 percent to 49,800 won despite shifting to the red in the third quarter due to increased fuel costs and a weakening local currency.
Shipbuilders were mixed. Top shipyard Hyundai Heavy Industries fell 1.55 percent to 285,500 won, but Daewoo Shipbuilding & Marine Engineering rose 0.59 percent 25,750 won after clinching a $400 million deal to build two liquefied natural gas carriers.
Hana Financial Group slumped 1.83 percent to 37,600 won. The No. 4 banking group is awaiting the financial regulator’s decision on U.S. buyout fund Lone Star’s 51.02 percent stake in Korea Exchange Bank, which it hopes to acquire.
The local currency closed at 1,131.9 won against the greenback, up 13.7 won from Tuesday’s close, after South Korea and Japan agreed to expand their currency swaps to $70 billion from $13 billion, dealers said.
(Yonhap News)
