South Korean stocks closed 1.33 percent higher on Monday as investors were emboldened by hopes that a new EU fiscal treaty may help solve the eurozone debt crisis, analysts said. The local currency fell against the U.S. dollar.
The benchmark KOSPI gained 25.01 points to 1,899.76. Trading volume was moderate at 404.2 million shares worth 5.28 trillion won ($4.61 billion) with gainers outpacing losers 515 to 293.
“European leaders’ agreement on a new fiscal treaty gave some support to the market, but it is too early to say that the market’s gain was meaningful as there are still divided views about the effectiveness of the deal in soothing the eurozone debt crisis,” said Kim Hyoung-ryoul, an analyst at Kyobo Securities Co.
Kim said that the Seoul markets could be easily swayed by the development of Europe’s debt problems this week in a situation that the outlooks for the global economy and corporate earnings are not likely to prop up the market.
The market’s upward gains were mainly led by program buying, but in late trading, foreign investors scooped up a net 1.28 billion won worth of local stocks.
Except for Britain, European leaders from 26 countries agreed on a plan on Friday to adopt tougher budget rules for fiscal
integration, but global credit appraiser Moody’s Investors Service warned that the agreement is short of reducing risks of downgrading credit ratings of the region’s nations.
U.S. stocks closed higher on Friday on optimism about the eurozone debt problems. The Dow Jones industrial average rose 1.55 percent and the tech-laden Nasdaq composite index gained 1.94 percent.
Tech shares gained ground. Market leader Samsung Electronics rose 2.94 percent to 1,084,000 won and chip giant Hynix Semiconductor advanced 3.97 percent to 22,250 won.
Tobacco company KT&G rose 3.21 percent to 83,500 won and leading refiner SK Innovation gained 1.2 percent to 169,000 won.
But shipbuilder Daewoo Shipbuilding & Marine Engineering lost 0.69 percent to 28,650 won after it said its European client
canceled a deal valued at 589.3 billion won.
After trading in a tight range, the local currency closed at 1,146.90 won to the greenback, down 0.4 won from Friday’s close as offshore investors bought the greenback, dealers said.
(Yonhap News)
