Korean stocks ended 1.37 percent higher on Tuesday as institutional investors scooped up carmakers and financial shares, overshadowing concerns over the eurzone debt crisis, analysts said. The local currency rose against the U.S. dollar.
The benchmark Korea Composite Stock Price Index climbed 28.09 points to 2,076.83, the second straight session of gains.
Trading volume was light at 207 million shares worth 6.12 trillion won ($5.65 billion), with gainers outpacing losers 512 to 302.
“The KOSPI’s advance was stronger than expected. The Seoul bourse gained ground as investors were accustomed to negative news like the eurozone debt crisis and China’s consumer inflation data in May seemed to ease concerns about an imminent rate hike,” said Kwak Joong-bo, a market analyst at Samsung Securities Co.
But Kwak said it is too early to say that the KOSPI has regained upward momentum as economic uncertainty persists.
The KOSPI started weaker as sentiment remained fragile on concerns about the eurozone debt crisis. Global credit appraiser S&P downgraded Greece’s sovereign credit rating on Monday by three notches to “CCC” from “B,” saying that the debt-ridden country “will likely” face a debt restructuring.
But solid institutional buying reversed the KOSPI’s earlier losses. Institutional investors snapped up a net 381.7 billion won worth of local stocks on the main bourse while foreign investors remained net sellers of Seoul stocks.
Tech, bank and carmaker shares led the market’s bull run.
Market leader Samsung Electronics advanced 1.17 percent to 863,000 won and chip giant Hynix Semiconductor rose 1.14 percent to 26,650 won.
On the back of solid performances in the global markets, leading carmaker Hyundai Motor jumped 4.19 percent to 236,000 won and its affiliate Kia Motors rose 3.39 percent to 73,200 won.
No. 2 banking group Woori Finance Holdings added 0.38 percent to 13,200 won after the financial watchdog said it is not desirable for state-owned KDB Financial Group to bid for Woori Finance.
U.S. markets closed mixed on Monday amid economic uncertainty.
The Dow Jones industrial average inched up 0.01 percent while the tech-laden Nasdaq Composite Index fell 0.15 percent.
The local currency ended at 1,082.60 won to the dollar, up 3.3 won from Monday’s close, as offshore investors unloaded the greenback, dealers said.