Market up a bit despite foreign selling

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Market up a bit despite foreign selling

Korean stocks rallied slightly even though foreign investors continued selling local shares for the sixth straight day.

The benchmark Kospi added 6.51 points to close at 1,889.24. Trading volume stood at 275.8 million shares worth 3.44 trillion won ($3.05 billion). The won gained against the U.S. dollar.

The index flirted with the 1,890 level much of the day.?

The rally was mostly attributed to better-than-expected U.S. economic data, including retail sales, analysts said.

“U.S. retail sales added confidence in the global economic recovery,” said Jeon Seung-ji, an analyst at Samsung Futures in Seoul. “There are expectations that the recent pullout of emerging-market equities will abate.”

“The Kospi has been experiencing drops due to falling Samsung Electronics shares and increasing volatilities in emerging markets, but we may have some expectations for a rally next week when the U.S. Fed’s open market committee holds a meeting,” said an analyst at Hyundai Securities.

Samsung Electronics’ shares rebounded 0.88 percent to 1,369,000 won after seven days for decline.?Korea Electric Power Corporation (4.05 percent), Samsung Life Insurance (2.44 percent) and LG Chem (1.17 percent) also saw gains.?

Meanwhile, the tech-heavy Kosdaq fell 4.78 points to close at 536.04.

The Korean won rose 7.9 to 1,126.5 against the dollar, the biggest gain since April 15, according to data compiled by Bloomberg.

The currency weakened 0.8 percent this week. One-month implied volatility, a measure of expected moves in the exchange rate used to price options, fell 51 basis points, or 0.51 percentage points, to 10.48 percent. It rose 96 basis points this week, the data showed.

Korea must watch global financial markets and be ready to act with flexibility to contain excessive volatility in foreign-exchange markets and capital flows, central bank Governor Kim Choong-soo said in a speech yesterday. The Bank of Korea Thursday left its benchmark interest rate unchanged at 2.5 percent after unexpectedly cutting borrowing costs by a quarter of a percentage point in May.

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