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Tech and financial shares lift Korean bourse

Aug 01,2008
Korean stocks closed higher yesterday as investors snapped up tech and financial shares, taking a cue from overnight gains in U.S. markets, analysts said. The local currency gained against the U.S. dollar.

The benchmark Korea Composite Stock Price Index. or Kospi, gained 16.9 points, or 1.08 percent, to 1,594.67. Volume was thin at 229.7 million shares worth 4.1 trillion won ($4.1 billion), with gainers outpacing losers, 455 to 328.

“Foreign investors’ net buying of local stocks helped prop up the market,” said Joo Sang-chul, an analyst at Kyobo Securities. “They went on a buying spree of local stocks on eased concerns over a global credit crunch.

But Joo said whether foreign investors make a full-fledged return to the Seoul bourse is likely to depend on how smoothly the problems of the credit squeeze resolve.

Foreign investors bought a net 76 billion won worth of local stocks. Their ownership of local stocks on the main bourse reached 29.9 percent as of Tuesday, marking the first time that foreign ownership has fallen below 30 percent in eight years.

Most shares got off to a strong start, led by tech and financial gains. Tech bellwether Samsung Electronics gained 2.9 percent to 564,000 won, and chip giant Hynix Semiconductor advanced 2.6 percent to 21,650 won despite its weaker earnings. Hynix said earlier in the day that its net loss widened sharply to 707.8 billion won in the second quarter as a global chip glut weighed down chip prices.

Financial shares traded in positive territory, mirroring gains of their peers in U.S. markets. Top lender Kookmin Bank rose 0.2 percent to 58,000 won and No. 2 financial services firm Shinhan Financial Group added 0.4 percent to 47,400 won on stronger-than-expected earnings. Shinhan posted a net income of 791.2 billion won in the second quarter, up 15 percent from a year earlier due to higher profits from its nonbanking operations.

But Hyundai Heavy Industries, the world’s largest shipbuilder, fell 0.3 percent to 311,500 won, and Korea’s No. 2 carmaker, Kia Motors, declined 1.2 percent to 12,600 won. U.S. stocks rallied Wednesday on financial gains and a rise in private-sector jobs. The Dow Jones industrial average gained 1.63 percent and the Nasdaq composite index rose 0.44 percent. Yonhap



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