South Korean stocks rallied 1.14 percent on Wednesday as Greece's failure to pay its debt to the International Monetary Fund was much expected, coming as no surprise to investors, analysts said. The local currency weakened against the U.S. dollar.
The benchmark Korea Composite Stock Price Index rose 23.69 points to 2,097.89. Trading volume was heavy at 466.7 million shares worth 5.8 trillion won ($5.19 billion), with gainers far beating decliners 605 to 221.
The local stock market remained calm after Greece missed a $1.8 billion debt payment on Tuesday (Greece time), becoming the first developed country to default on a loan to the international lending agency.
The expiration of the bailout program followed a tense negotiation over the weekend during which Greek Prime Minister Alexis Tsipras announced plans for a referendum on a debt deal on Sunday and urged Athens to vote against it.
"The Greek debt issue fuels uncertainties, but investors don't expect massive ripple effects in the global financial market like the past debt crisis caused," Ryo Yong-seok, a researcher at Hyundai Securities, said. "For the South Korean market, it is considered a temporary factor rather than an issue that could change the overall market trend."
Earlier in the day, the government and the ruling party agreed to draw up an extra budget worth about 15 trillion won to shore up Asia's fourth-largest economy as it was reeling from slackened domestic demand in the wake of the Middle East Respiratory Syndrome outbreak.
Foreigners and retail investors bought a net 13.4 billion won and 65.2 billion won, respectively, while institutions offloaded a net 73.6 billion won.
Samsung affiliates advanced after a Seoul court dismissed an injunction request by U.S. hedge fund Elliot Associates L.P., clearing a legal hurdle for the nation's top conglomerate to push ahead with a proposed merger between Cheil Industries and Samsung C&T.
Market bellwether Samsung Electronics, also the No. 1 market cap, went up 2.13 percent to 1,295,000 won, while Cheil Industries rose 1.97 percent to 181,000 won, and Samsung C&T edged up 0.6 percent to 66,600 won.
Bio shares were among the top gainers. Hanmi Pharmaceutical jumped 9.64 percent to 512,000 won, and Boryung Pharm soared 10.95 percent to 78,000 won.
The South Korean won ended at 1,117.5 won against the greenback, down 2 won from Tuesday's close.
Bond prices, which move inversely to yields, ended lower. The yield on three-year Treasurys added 1.2 basis points at 1.805 percent, and the return on the benchmark five-year government bonds gained 1.5 basis points to 2.085 percent. (Yonhap)
