Seoul stocks rally on recovery hope, coming earnings report season

South Korean shares rallied Monday on hopes of economic recovery led by the government's extra budget and possible robust earnings from tech companies. The Korean won rose against the US dollar.

The benchmark Korea Composite Stock Price Index (KOSPI) rose 35.52 points, or 1.65 percent, to close at 2,187.93. Trading volume was high at about 659 million shares worth some 12 trillion won ($9.6 billion), with gainers outnumbering losers 573 to 267.

Foreigners sold a net 258 billion won and individuals offloaded a net 362 billion won, while institutions bought a net 625 billion won.

The KOSPI's rally was largely attributed to rising optimism for a quick economic recovery.

The National Assembly passed a 35.1 trillion-won ($29.3 billion) extra budget Friday, while the number of new COVID-19 infections showed a slight decrease.

South Korea added 48 new coronavirus infections Monday, down from 61 reported Sunday and 63 on both Friday and Saturday.

Possible robust earnings from some tech companies for the second quarter also buoyed investor sentiment. Tech and internet shares surged in particular amid the prolonged COVID-19 outbreak.

"It's time that the stocks show different price changes according to their earnings report," IBK Securities analyst Kim Ye-eun said.

Most large caps closed higher.

Tech giant Samsung Electronics jumped 2.61 percent to 55,000 won as brokerage houses raised the company's quarterly earnings estimate. Samsung's April-June earnings guidance is set to be released Tuesday.

No. 2 chipmaker SK hynix added 0.70 percent to 86,000 won.

Untact shares also fared strong. Internet giant Naver advanced 1.44 percent to 281,500 won, and its rival Kakao surged 2.21 percent to 300,500 won.

Leading online game developer NCSOFT Corp. spiked 5.40 percent to 995,000 won.

Top pharmaceutical firm Samsung BioLogics dropped 2.20 percent to 754,000 won, while leading chemical maker LG Chem climbed 0.39 percent to 509,000 won.

The local currency closed at 1.195.80 won against the US dollar, up 2.80 won from the previous session's close.

Bond prices, which move inversely to yields, closed lower. The yield on three-year Treasurys rose 1.6 basis points to 0.854 percent, and the return on the benchmark five-year government bond jumped 2.1 basis points to 1.136 percent. (Yonhap)