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Beaten-down blue chips have their day

Nov 28,2008
Korean stocks surged 3.27 percent yesterday as investors bought banks, construction and other beaten-down blue chips, emboldened by ongoing global efforts to fight worldwide recession, analysts said. The won rose against the U.S. dollar. The benchmark Kospi climbed 33.7 points to 1,063.48, marking the third consecutive day of advance. Volume was heavy at 555.87 million shares worth 5.87 trillion won ($3.97 billion) with gainers outnumbering losers 646 to 193. “Investor jitters seemed to ease following U.S. market rallies, driven by stepped-up global efforts to fight an economic recession,” said Rhoo Yong-seok an analyst at Hyundai Securities. “Foreigners continued their net buying of local shares, helping the index gain more momentum.” Foreigners snapped up a net 225.24 billion worth of local shares, extending their net buying to two sessions. Institutions bought 238.54 billion worth of equities, while retailers unloaded stocks valued at around 448 billion. Market sentiment was lifted recently on intensifying global efforts to fight a worldwide recession in the wake of the financial turmoil, with the European Union announcing a large-scale economic stimulus package and China cutting its key interest rate the previous day. U.S. stocks closed up Wednesday on renewed hopes that the government will bail out struggling automakers. The Dow Jones industrial average jumped 2.91 percent, rising for a fourth straight session, while the Nasdaq rose 4.6 percent. Major banks and brokerages drove the local index higher. Woori Finance Holdings, the country’s top financial services firm by market value, jumped 14.67 percent and fifth-largest Korea Exchange Bank surged by its daily limit of 14.98 percent for two days in a row. Construction shares rallied for the second consecutive day on optimism that industry-wide restructuring will lead to fast recovery. Daewoo Engineering and Construction advanced 5.19 percent and Kumho Industry surged 4.44 percent. Auto shares added to the upward move with industry leader Hyundai Motors closing up 4.59 percent. Telecoms, however, closed sharply down as investors locked in profits from their relatively strong performances. Top mobile carrier SK Telecom lost 1.59 percent, while No. 2 KTF plunged 5.92 percent. Yonhap


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