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Lower oil prices improve mood on Kospi

July 18,2008
Korean stocks finished higher yesterday, ending a three-day losing streak, as investor sentiment was buoyed by falling oil prices, analysts said.

The benchmark Kospi climbed 18.16 points, or 1.2 percent, to 1,525.56.

Volume was moderate at 315.9 million shares worth 4.51 trillion won ($4.44 billion), with gainers outpacing losers, 560 to 241.

“A drop in oil prices seems to have soothed market jitters, at least temporarily, not only in the Seoul bourse but also other markets throughout the world,” said Bae Sung-yung, an analyst at Hyundai Securities.

Crude prices fell $4.14 Wednesday on the New York Mercantile Exchange to settle at $134.60 a barrel, recording a fall of $10.50 since Monday.

The price fall bolstered U.S. stocks, with the Dow Jones industrial average advancing 2.5 percent and the tech-laced Nasdaq composite index soaring 3.12 percent.

Scheduled quarterly earnings announcements by major investment banks JP Morgan and Merrill Lynch in the U.S. on Thursday, local time, could also serve as an indicator of the health of the U.S. financial market and dispel uncertainties for the time being, Bae noted.

Lee Jae-man, an analyst at Tong Yang Securities, forecasted the key index to continue its upward trend on positive second-quarter earnings outlooks of local companies.

Tech exporter stocks rallied, with market heavyweight Samsung Electronics surging 4.1 percent to 584,000 won, and its chip-making rival Hynix Semiconductor advancing 2.5 percent.

Shipyard and brokerage issues also chalked up strong gains.

Hyundai Heavy Industries, the world’s largest shipbuilder, gained 0.8 percent, and leading brokerage Samsung Securities rose 0.5 percent.

A drop in oil prices buoyed airlines while weighing on refiners.

Top carrier Korean Air surged 4.8 percent, while leading refiner SK Energy fell 1.7 percent. No. 3 S-Oil lost 1.1 percent.

The local currency closed at 1,012.8 won against the dollar, down 3.5 won from Wednesday’s close, as offshore investors bought up the greenback, dealers said.

Yonhap


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