South Korean stocks ended 0.06 percent higher on Thursday after topping the 1990-mark mid-session, led by large gains by market leader Samsung Electronics following its decision to buy back shares, analysts said. The South Korean won gained ground against the greenback.
The benchmark Korea Composite Stock Price Index (KOSPI) rose 1.25 points to 1,982.09. The figure once topped the psychologically important 1990-mark during the morning trade, the highest since Oct. 1.
Trading volume was low at 287.84 million shares worth 5.5 trillion won (US$5 billion), with decliners beating gainers 478 to 324.
Analysts said the sudden jump in the price of Samsung Electronics shares led the overall gain.
"Samsung Electronics alone contributed about 20 points to the local bourse today, and considering the company's huge market cap, its rise had a considerable effect," said Lee Jae-hoon, an analyst at Mirae Asset Securities Co.
The tech company's market cap currently stands at over 15 percent of the bourse, as opposed to the 3-percent range of Hyundai Motor, the runner-up after Samsung Electronics.
Analysts say that for most investors, however, the day's trading session probably caused concerns.
"Foreign investors and institutions were likely to have reduced their stakes in Samsung Electronics after the firm's disappointing third-quarter earnings report," Lee said. "On the other hand, they would have increased their shares in other seemingly well-to-do companies, such as oil refiners, which fell due to oil prices that slid further."
News of a rate cut in China over the weekend had improved investor sentiment for South Korean oil refiners who may see a boost in demand from the world's No. 2 economy, but the rise in related shares was limited.
"Samsung Electronics shot up as investors scrambled to benefit from the stock buyback, while many other previously purchased shares saw a sharp downturn as they were sold off, leaving many investors perplexed," Lee added.
Foreigners sold a net 10.12 billion won, and retail investors offloaded a net 13.22 billion won. Institutions bought more shares than they sold at 28.62 billion won.
Samsung Electronics jumped 5.25 percent to end at 1,264,000 won. The leading handset maker earlier announced it will begin repurchasing its shares as a means to stabilize stock prices which had been in a slump in recent months.
Cheil Worldwide, the advertising arm of Samsung Group, gained 0.78 percent to 19,350 won, after it disclosed plans to offload 220.8 billion worth of its shares to Samsung Electronics in a bid to "bolster management stability and secure liquidity."
Arms company Samsung Techwin lost 2.25 percent to close at 28,200 won, stabilizing compared to the previous day's loss of 14.9 percent after news hit that it will be sold to Hanwha, another South Korean conglomerate.
Autos closed bullish, with industry leader Hyundai Motor adding 3.44 percent to 180,500 won and its sister company Kia Motors edging up 0.72 percent to 55,900 won. Car parts provider Hyundai Mobis climbed 3.53 percent to finish at 249,000 won.
The local currency ended at 1,098.40 won against the U.S. dollar, up 8.10 won from Wednesday's close.
Bond prices, which move inversely to yields, ended lower. The yield on three-year Treasurys moved up 1.6 basis point to 2.114 percent, and the return on five-year government bonds also increased 1.6 basis point to 2.283 percent. (Yonhap)
