Foreign investors come back, lifting Kospi

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Foreign investors come back, lifting Kospi

Korean stocks finished substantially higher yesterday as foreign investors snapped up blue chips in line with overnight U.S. gains, analysts said. The local currency fell against the greenback.

The benchmark Kospi rose 28.34 points, or 2.61 percent, to 1,113.06. Volume was heavy at 857.5 million shares worth 9.04 trillion won ($6.99 billion), with gainers outpacing losers 643 to 218.

“Foreign investors are continuing to shore up the market for the fourth-consecutive session on the back of overnight Wall Street gains and confidence from rate cuts and the [recently announced] currency swap arrangement,” said Song Young-geun, an analyst at Dongbu Securities.

U.S. stocks finished higher Thursday following a report that the U.S. gross domestic product fell 0.3 percent, recording a smaller-than-expected drop, in the third quarter. The Dow Jones rose 2.11 percent and the tech-heavy Nasdaq advanced 2.49 percent.

Heavy machinery and shipyard stocks chalked up strong gains. Leading power generator producer Doosan Heavy Industries soared 14.91 percent to 55,500 won and Hyundai Heavy Industries, the world’s leading shipyard, rose 5.71 percent to 166,500 won.

Construction and retail stocks also finished in the black. Hyundai Engineering and Construction climbed 14.98 percent to 52,200 won and Shinsegae, operator of the nation’s largest discount store chain, rose 2.88 percent to 447,000 won.

Tech and finance stocks, however, finished lower on profit taking after the Kospi’s 12 percent gain on Thursday. LG Electronics tumbled 5.03 percent to 94,500 won and Shinhan Financial Group shed 5.15 percent to end at 31,300 won.

KB Financial Group, which owns Korea’s biggest bank, dropped 8.6 percent to 32,000 won. Kookmin posted a 29 percent drop in net income a day earlier.

The Korean currency closed at 1,291 won to the greenback, down 41 won from Thursday when it posted its biggest gain versus the greenback in a decade on a currency swap deal with the U.S., dealers said.

Bond prices, which move inversely to yields, fell sharply. The return on three-year Treasuries rose 0.08 percentage point to 4.47 percent. Yonhap, Bloomberg
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