South Korean stocks closed 0.54 percent higher Thursday on optimism that Greece may wrap up its austerity talks to receive a fresh bailout from its European neighbors, analysts said. The local currency edged up against the U.S. dollar.
The benchmark KOSPI gained 10.89 percent to 2,014.62. Trading volume was heavy at 549.9 million shares worth 7.87 trillion won ($7.05 billion) with gainers outpacing losers 440 to 373.
In early trading, strong foreign and program selling sent the KOSPI tumbling as much as 1.2 percent, but foreigners turned to buying, helping the key index end the session in positive territory.
“Foreigners reverted to scooping up shares in the afternoon as news was coming from Europe that Greece is close to an agreement over a reform plan,” said Oh On-su, an analyst at Hyundai Securities Co.
The Greek government reportedly reached a conclusion on its reforms except the national pension to get a second bailout fund from other European nations, including Germany.
“Prospects on Greece offset worries on China’s inflation, adding volatility to the KOSPI toward the market close,” said Oh.
China’s consumer prices grew 4.5 percent in January, compared with 4.1 percent on-month gain.
Foreigners snapped up shares worth a net 99.9 billion won and retail investors bought 43.5 billion won. Programs unloaded a net 357.1 billion won.
Construction and chemical issues led the gain. Industry leader Hyundai Construction & Engineering rose 2.6 percent to 82,900 won and LG Chemical jumped 3.33 percent to 434.000 won.
Tech blue chips and heavy industries also gathered ground, with No. 2 chipmaker Hynix Semiconductor rising 2.08 percent to 27,050 won and Hanjin Heavy Industries shooting up 5.22 percent to 23,200 won.
Leading polysilicon manufacturer OCI, soared 8.44 percent to 302,000 won following media reports that it has forged a deal with Saudi sovereign firm Aramco to be provided with crude oil for the next 20 years.
Shares of STX Group affiliates, South Korea’s shipbuilding and shipping conglomerate, rallied on the announcement by its bulk carrier unit STX Pan Ocean that it plans to sell 250 billion won of bonds with warrants, lifting prospects on the stocks. Holding company STX, and STX Pan Ocean skyrocketed 10.65 percent to 16,100 won and 12.21 percent to 17,000 won, respectively.
The local currency ended at 1,115.6 won against the greenback, up 0.2 won, as foreigners switched to buying local equities from an earlier selloff, dealers said.
