South Korean stocks closed 0.84 percent higher Monday, dispelling concerns over potential negative impacts from the Japanese upper house election on the local economy, analysts said. The local currency rose against the U.S. dollar.
The benchmark Korea Composite Stock Price Index (KOSPI) advanced 8.94 points to finish at 1,880.35. Trading volume was moderate at 353.2 million shares worth 3.60 trillion won ($3.22 billion) with gainers outnumbering decliners 432 to 361.
"The Abe coalition's win in the upper house election has no influence on us since everyone had been expecting the result for quite some time," said Lim Soo-gyun, an analyst at Woori Investment & Securities Co.
Rather, the pledge by financial leaders of the Group of 20 over the weekend to support growth contributed to relieving the market, he said, adding the Seoul market will hinge on companies' second-quarter earnings.
Japanese Prime Minister Shinzo Abe's ruling coalition won a majority in the upper house of parliament in elections Sunday, giving it control of both chambers and more leeway to push for his aggressive economic stimulus.
Tokyo's hawkish economic policy has been a major drag to the local economy, which heavily relies on exports that compete with Japanese rivals in the global markets. As Abe's stimulus has spurred its currency to fast depreciate, it has been feared to hurt Korea's exports.
Foreigners scooped up a net 19.1 billion won on the main bourse, with institutions also buying a net 147.4 billion won.
Chemical and shipbuilding blue-chips led the climb. LG Chem rose 2.23 percent to 275,500 won on expectations for better second-quarter earnings. Hyundai Heavy Industries, the world's biggest shipyard, shot up 4.76 percent to 209,000 won after the company said last week its first-half overseas orders increased 70 percent from a year earlier.
Tech heavyweight Samsung Electronics closed flat at 1,273,000 won, with auto-parts maker Hyundai Mobis falling 0.19 percent to 259,500 won.
The local currency ended at 1,118.90 won against the greenback, up 2.8 won from Friday's close, as foreigners opted to snap up local equities, dealers said.
Bond prices, which move inversely to yields, closed unchanged.
The yield on three-year Treasuries stayed flat at 2.85 percent and the return on the benchmark five-year government bonds held steady at 3.10 percent. (Yonhap News)
