Seoul shares rise 0.87 percent on stimulus hopes

South Korean stocks closed up 0.87 percent Wednesday as investor sentiment got a boost from heightened optimism over stimulus efforts in the United States and Europe, analysts said. The local currency inched up against the U.S. dollar.

The benchmark Korea Composite Stock Price Index (KOSPI) rose 16.43 points to finish at 1,903.23, extending its winning streak to a third consecutive session and restoring the 1,900 mark in seven weeks. Trading volume was moderate at 477.2 million shares worth 5.34 trillion won ($4.73 billion), with gainers outpacing decliners 476 to 331.

"Sound corporate earnings and good economic data recently lifted hopes that the economy's turning for the better, whetting foreigners' appetite," said Lee Jae-man, an analyst at Tongyang Securities Co.

Foreign investors scooped up a net 729.1 billion won, the largest daily net buying since Feb. 2 this year.

Policymakers' remarks in the U.S. Federal Reserve and the European Central Bank, in which they firmly supported further economic stimulus to boost growth, also drove up shares, Lee added.

Most shares closed in positive territory, with large-cap tech and financial firms leading the gains. Chipmaker SK hynix jumped 3.41 percent to 22,750 won and top lender Woori Finance climbed 3.76 percent to 11,050 won.

E-mart, a leading discount operator, shot up 2.81 percent to 256,000 won after the local court upheld the injunction filed by major discount stores to annul the regular shutdown initiated by the government to aid smaller shops.

Halla Climate Control Corp., a major auto parts marker, erased the previous session's dip to rise 2.17 percent to 23,500 won, on prospects that it will be acquired by the Mando Corp., another local player.

In contrast, automakers lost ground on concern over the trade union's third round of strikes scheduled to kick off on Friday. Top player Hyundai Motor and its affiliate Kia Motors shed 0.21 percent to 236,000 won and 0.13 percent to 75,800 won, respectively.

The local currency ended at 1,128.30 won against the greenback, up 0.5 won from Tuesday's close, as foreigners opted to make risky bets in local equities, dealers said.

Bond prices, which move inversely to yields, closed higher. The yield on three-year Treasuries edged down 0.02 percentage point to 2.76 percent and the return on the benchmark five-year government bonds also fell 0.02 percentage point to 2.86 percent.

(Yonhap News)