Specter of Fed stimulus prods Kospi to rise

Korean stocks gained 0.65 percent yesterday on expectations that the U.S. Federal Reserve will announce new stimulus measures to bolster economic growth, analysts said.

The local currency gained against the U.S. dollar.

The Kospi moved up 12.35 points to close at 1,904.12.

Trading volume was light at 354 million shares worth just under 3.63 trillion won ($3.15 billion), with gainers clearly outpacing losers 555 to 276.

“The market is waiting to see what measures will be taken by the Fed that could fuel growth in the world’s largest economy and other countries,” said Lee Sang-jae, a senior economist at Hyundai Securities. Because preconditions like modest gains in U.S. consumer prices have been met, there is a chance that new quantitative easing measures may be taken, he said.

Song Chang-sung, an analyst at Hanyang Securities, said developments taking place in the U.S. and China are beginning to exert a greater impact on the local bourse, which has been swayed by the euro zone in recent months.
The market watcher, however, said recent developments such as Spain’s banking sector woes and high borrowing costs will continue to influence investors as Europe has a long way to go before its debt problems are resolved.
Big-cap shares in electronics, steel, chemicals and refining gathered ground, while autos and heavy industry remained flat or lost ground.

Market bellwether Samsung Electronics gained 0.64 percent to 1,252,000 won, with memory chip giant SK Hynix surging 3.98 percent to 24,800 won. Global steelmaker Posco climbed 0.79 percent to 382,500 won, and LG Chem, a leading manufacturer of rechargeable batteries, added 0.86 percent to 294,000 won.

Top auto parts maker Hyundai Mobis rose 1.24 percent to 285,500 won, with the country’s leading oil refiner SK Innovation gaining 1.01 percent to 149,500 won. Leading carmaker Hyundai Motor and its affiliate Kia Motors finished the trading session flat at 253,500 won and 80,000 won, respectively.

The local currency finished at 1,151.0 won to the U.S. greenback, up 5.3 won from Tuesday’s close.

Yonhap