Seoul shares end up 1.1% on tech, refiner gains

South Korean stocks closed 1.1 percent higher on Thursday as gains of tech shares, refiners and shipbuilders propped up the market despite persisting concerns about the eurozone debt turmoil, analysts said. The local currency rose against the U.S. dollar.

After trading in a tight range, the benchmark Korea Composite Stock Price Index (KOSPI) rose 20.60 points to close at 1,876.67, snapping a two-session losing streak. Trading volume was moderate at 348.7 million shares worth 4.67 trillion won ($4.13 billion) with gainers outpacing losers 591 to 246.

“Once the KOSPI rises above the 1,900 mark, the index is showing signs of fatigue as uncertainty surrounding the eurozone debt crisis prevents it from rising further,” said Lee Jae-man, an analyst at Tong Yang Securities Co.

But Lee said that local bank shares shrugged off impacts of a Fitch report, which warned about potential risks of Europe’s debt crisis on U.S. banks.

Despite the KOSPI’s moderate gains, foreign investors became net sellers of local stocks by unloading a net 344.6 billion won worth of Seoul shares on the main bourse.

Concerns about Europe’s debt crisis have not showed signs of abating as a sharp rise in yields of benchmark bonds of Italy, Spain and other eurozone countries are fueling fears about crisis contagion.

Global rating agency Fitch Ratings warned that it may slash its stable outlook for U.S. banks if the stress of eurozone debt is not resolved in a timely manner.

Tech blue chips and oil refiners gained ground. Chip giant Hynix Semiconductor advanced 3.8 percent to 23,200 won on a report that Rambus lost an antitrust jury trial against the Korean chipmaker and Micron Technology.

Market leader Samsung Electronics added 0.51 percent to 980,000 won and flat panel giant LG Display gained 3.12 percent to 24,800 won.



No. 4 banking group Hana Financial Group rose 3.45 percent to 35,950 won, one day before the financial regulator plans to order Lone Star to sell down its stake in Korea Exchange Bank. A potential sale order is expected to expedite Hana Financial Group’s offer to buy KEB from Lone Star.

Leading shipbuilder Hyundai Heavy Industries and its rival Daewoo Shipbuilding & Marine Engineering gained momentum on a report that they have been picked among three candidates for the British Navy’s project to purchase logistics support vessels.

Hyundai Heavy Industries gained 1.08 percent to 280,500 won and Daewoo Shipbuilding added 5.72 percent to 26,800 won.

Top oil refiner SK Innovation gained 2.62 percent to 176,500 won and its smaller rival S-Oil rose 3.95 percent to 118,500 won.

The local currency closed at 1,130.70 won to the greenback, up 5.9 won from Wednesday’s close, as exporters and companies sold the dollar, dealers said.

The Korean unit underwent volatility as it lost ground in the morning by falling to as low as 1,144.50 per the dollar on Europe’s crisis. But in late trading, the Korean currency reversed its course on the back of exporters’ dollar sale. 

(Yonhap News)