South Korean stocks closed 0.43 percent higher Wednesday as local exporters continued to rebound from their recent losses on the improved foreign exchange market conditions, analysts said. The local currency fell against the U.S. dollar.
The benchmark Korea Composite Stock Price Index (KOSPI) climbed 8.47 points to 1,964.43. Trading volume was high at 515.9 million shares worth 4.2 trillion won (US$3.87 billion) with gainers outnumbering decliners 425 to 367.
"The local stock market recouped some recent losses made earlier as the won's appreciation against the U.S. dollar has slowed down in recent days," said Kim Ji-hyung, an analyst at Hanyang Securities Co.
"Foreign investors also reduced their sell-off on the main bourse," Kim added. "Other than Vanguard Group's recent move to switch to a new benchmark index, there are few pressures inducing foreign selling."
U.S. fund manager Vanguard Group Inc. decided to switch the index provider for its funds to the Financial Times Stock Exchange (FTSE) from the Morgan Stanley Capital International (MSCI), effective on Jan. 10.
Unlike the MSCI, the FTSE does not include South Korea in their benchmark portfolio, which drew concerns among local analysts that there would be a huge outflow of foreign funds from the local stock market.
Foreigners dumped a net 94.8 billion won worth of shares, extending their selling streak to five sessions. Retail investors offloaded a net 65.5 billion won, while institutions scooped up
165.8 billion won.
South Korean tech giant Samsung Electronics edged up 2.2 percent to 1,440,000 won as foreign investors purchased its shares.
LG Life Sciences, a South Korean pharmaceutical manufacturer, moved up 5.15 percent to 59,200 won as its fourth-quarter earnings soared more than 12-fold from a year earlier thanks to steady sales of its products.
Dongbu Insurance, one of the country's leading nonlife insurers, gained 2.9 percent to 47,900 won on the market forecast that the firm may join the KOSPI 200, a basket of 200 blue chip shares listed on the main Seoul bourse.
Shipbuilders also finished higher due to the improved outlook on the industry, with the country's No. 1 player Hyundai Heavy Industries rising 0.69 percent to 219,000 won, and Samsung Heavy Industries gaining 0.66 percent to 38,050 won.
STX Pan Ocean, the nation's leading bulk carrier, surged 10.31 percent to 6,100 won as its parent conglomerate STX plans to sell a stake in the key affiliate.
On the other hand, Korea Electric Power Corp., the state-run electricity provider, tumbled 5.03 percent to 32,100 won as an official said the firm may not increase electricity fees this year.
The local currency ended at 1,085.5 won against the greenback, down 3 won from Tuesday's close, as investors sat on their hands ahead of the U.S. Federal Reserve's Federal Open Market Committee meeting, dealers said. (Yonhap News)
