Seoul shares jump 3.26% on hopes for eurozone

South Korean stocks closed 3.26 percent higher Monday as investor sentiment was underpinned by growing prospects for solutions to curb the eurozone debt woes, analysts said. The local currency rose against the U.S. dollar.

The benchmark KOSPI rose 59.94 points to close at 1,898.32. Trading volume was moderate at 369.3 million shares worth 6.66 trillion won ($5.88 billion) with gainers outpacing losers 691 to 165.

“Growing hopes for resolving the eurozone debt crisis gave solace to investors,” said Bae Sung-young, an analyst at Hyundai Securities Co.

Bae said that as the markets already priced in expectations for resolving Europe’s sovereign crisis, it may be difficult for the Seoul bourse to continue its rapid climb without strong earnings momentum or healthy economic data.

Global financial markets were lifted by growing hopes that political leaders from European Union neared a comprehensive plan to contain the eurozone debt crisis. U.S. markets closed higher on Friday with the Dow Jones industrial average rising 2.31 percent.

Foreign and institutional investors remained net buyers of local stocks. Offshore investors snapped up a net 181.7 billion won worth of Seoul stocks on the main bourse.

Construction shares posted solid gains on expectations that the death of Moammar Gadhafi would lead to the resumption of construction projects in Libya. Daewoo Engineering & Construction jumped 5.48 percent to 10,400 won and its rival Hyundai Engineering & Construction rose 4.69 percent to 71,500 won.

Tech and bank shares also gained ground. Market leader Samsung Electronics advanced 2.62 percent to 941,000 won and chip giant Hynix Semiconductor rose 3.02 percent to 23,900 won.

STX Corp., a de facto holding firm of STX Group, rose 3.44 percent to 13,550 won after saying that it will refrain from seeking large-scale mergers and acquisitions and instead focus on beefing up financial strength.

The local currency closed at 1,134.40 won to the greenback, up 13 won from Friday’s close, as offshore investors scooped up local stocks, dealers said. 

(Yonhap News)