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Seoul shares up 1.46% on Europe bailout plan

Oct. 27, 2011 - 19:44 By Korea Herald
South Korean stocks rose 1.46 percent on Thursday as investors were buoyed by a set of bailout measures agreed on by European policymakers and financialinstitutions. The local currency shot up against the U.S. dollar.

The benchmark Korea Composite Stock Price Index soared 27.73 points to a near three-month high of 1,922.04. Trading volume was heavy at 410.4 million shares worth 7.82 trillion won ($7.02 billion), with gainers far outnumbering decliners 594 to 234.

“Market watchers are split on the Europe move since it is short on specifics. However, it laid out a big framework that will likely help the region move closer to resolving its spiraling debt problems,” said Kwak Joong-bo, an analyst at Samsung Securities Co.

European leaders agreed to lower Greek’s debt burden by 50 percent and set up plans to scale up the region’s rescue fund as well as recapitalize European banks. The details of the deal, however, are set to be finalized later this year.

“While retail investors are locking in profits from the gain, institutions, especially pensions, are beefing up their buying, which is a good sign,” Kwak said, adding the upward strength may continue for the time being.

Shares gathered ground across the board, with steelmakers posting firm gains. Industry leader POSCO jumped 4.9 percent to 385,000 won and smaller player Hyundai Steel surged 9.98 percent to 102,500 won.

“Steelmakers have undergone steep losses on grim business outlooks. But a weakening raw material price and views that China may weaken its tightening raised hopes,” said Kyobo Securities Co. analyst Eom Jin-seok.

Refiners also rallied, with No. 1 refiner SK Innovation rising 3.85 percent to 175,500 won and Honam Petro Chemical soaring 10.99 percent to 318,000 won.

In contrast, techs ended in negative territory with market bellwether Samsung Electronics falling 1.07 percent to 924,000 won.

No. 2 chipmaker Hynix Semiconductor also lost 1.45 percent to 23,800 won after announcing that it swung to a net loss in the third quarter on a prolonged downturn in the memory chip industry.

Top mobile carrier SK Telecom, which saw its third-quarter earnings drop on increased spending, also ended down 1.55 percent at 159,000 won.

The local currency ended at 1,115.2 won to the greenback, up 17.1 won from Wednesday’s close, as Europe’s debt plan stoked investor appetite for riskier assets, dealers said. 

(Yonhap News)