South Korean stocks closed 0.33 percent higher Monday, as a hike in Japanese government bond yields last week lifted concerns over the yen's weakness, prompting foreigners to increase risky bets in local equities, analysts said.
The benchmark Korea Composite Stock Price Index (KOSPI) rose 6.52 points to finish at 1,979.97. Trading volume was light at 245.9 million shares worth 2.83 trillion won ($2.51 billion) with gainers outpacing decliners 444 to 367.
"Worries about the weakening yen have abated at least for now as the surge of Japanese bond yields provided a sense of relief in the local economy, especially among exporters," said Han Beom-ho, an analyst at Shinhan Investment Corp.
The yield of long-term Japanese government bonds surged late last week, sending its benchmark Nikkei average to plunge 7 percent as it will lead to a huge increase in the government's interest costs.
That caused the yen to pare its losing streak against the U.S dollar, which came as an advantage to Korean exporters, Han added, making the Seoul bourse attractive for foreigners.
Offshore investors snapped up a net 37.3 billion won, with institutions buying a net 105.6 billion won.
Blue-chip exporters gathered ground, with LG Electronics, a leading home appliance maker, jumping 3.12 percent to 82,500 won and No. 1 carmaker Hyundai Motor climbing 1.47 percent to 207,000 won.
Shares of financial firms closed in positive territory. No. 3 Hana Financial Group rose 0.66 percent to 37,850 won and the state-run Industrial Bank of Korea advanced 0.8 percent to 12,600 won.
In contrast, domestic-focused stocks finished bearish. SK Telecom, the country's largest mobile carrier, dropped 1.36 percent to 217,500 won with LG Uplus, the smallest player, sinking 1.24 percent to 11,950 won.
Hanjin Holdings Co., the shipping conglomerate, tumbled 4.04 percent to 4,750 won, after a local online media released a controversial list of high-profile Korean businessmen suspected of tax evasion, including its current chairwoman Choi Young-eun.
The local currency ended at 1,122.40 won against the greenback, up 5.0 won from Friday's close, largely on the back of the foreign buying, dealers said.
Bond prices, which move inversely to yields, closed slightly higher. The yield on three-year Treasuries inched down 0.01 percentage point to 2.61 percent and the return on the benchmark five-year government bonds also fell 0.01 percentage point to 2.70 percent. (Yonhap News)
