Follow the Leader: Seoul Issues Add 3%

Share prices in Seoul closed sharply higher Wednesday, powered by strong overnight gains on Wall Street and heavy foreign buying in key blue chips and bank shares.

The Korea Composite Stock Price Index shot up 16.32 points, or 3.3 percent, to close at 507.53. Trading volume was heavy at 354 million shares valued at 1.67 trillion won ($1.3 billion).

Gainers overwhelmed losers 619 to 186, with 58 other stocks unchanged. Twenty-one stocks rose by the daily limit of 15 percent, while 10 stocks tumbled by that limit.

Spurred by a 6.1% overnight rise in the U.S. Nasdaq index, foreign investors went on a hectic buying spree, purchasing shares worth 150 billion won to offset heavy futures-linked program selling ahead of the expiration of options contracts Thursday.

Large blue-chip issues led the market's advance. Samsung Electronics Co. added 2.2 percent to 186,000 won, and SK Telecom Co. surged 10.8 percent to 190,000 won on expectation that it will soon attract capital investment from Japan's NTT DoCoMo Inc.

Bank stocks also finished higher on heavy foreign buying. Kookmin Bank jumped 9.8 percent to 13,450 won and its merger partner, H&CB, rocketed 12.4 percent to 21,350 won on news that they agreed on a merger ratio and other issues that had delayed the merger. The banks, though, denied the reports.

In contrast, LG Electronics Co. lost 0.8 percent to 11,750 won, after the company announced Tuesday that it would participate in the planned rights issue by its affiliate, LG Telecom Co., reneging on its earlier promise not to do so. It said that it will buy 81.7 billion of new shares issued by LG Telecom.

"The move is likely to hurt LG Electronics' profits," said Min Hoo-sik, an analyst at Korea Investment Trust & Securities Co.

The Kosdaq market also rallied, with its composite index rising 2.62 points, or 4.1 percent, to 67.18. Korea Telecom Freetel put on 4.5 percent to 39,500 won, and Haansoft Inc. gained 4.4 percent to 4,070 won.

by Kim Hyun-chul