Korean shares rebound on foreign interest

Korean shares jumped 1.56 percent yesterday as foreign investors continued their net purchasing streak for a second day, responding to remarks made by some U.S. Federal Reserve officials earlier this week favoring the continuation of its bond-purchasing program. The benchmark Kospi rose 28.62 points to close at 1,863.32 at the Seoul bourse yesterday. Retail and institutional investors sold their investment of local stocks while foreign investors for a second day expanded their investment. The rise in the Kospi followed an improved index for the Dow Jones Industrial Average, which climbed 149.83 points, or 1 percent, to 14,910.14 on Thursday in New York.

“We’ve had a relatively sharp selloff over a couple of days and we’re getting a rebound here,” James Gaul, a portfolio manager at Boston Advisors LLC, said in a phone interview with Bloomberg. “Weaker economic numbers may be met with favor by the market because it can suggest that the Fed can slow the tapering process or not taper if the economy looks weaker than expected.”

Gross domestic product for the United States expanded at a revised 1.8 percent annualized rate from January through March, down from a prior estimate of 2.4 percent, figures from the Commerce Department showed Wednesday. Following weaker-than-expected data, Fed officials made remarks that it should continue on with its quantitative easing policy.

Boosted by foreign buying of local stocks, shares of Samsung Electronics jumped 0.22 percent yesterday to close at 1.3 million won ($1,138.59). Shares of Hyundai Motor also rose 3.44 percent to 225,500 won while shares of Posco increased 1.53 percent to 298,500 won.

Stock prices of financial institutions also went up. Shares of Shinhan Financial Group jumped 1.48 percent to 37,600 won, while shares of KB Financial Group rose 1.03 percent to 34,200 won. Shares of Woori Financial Group also jumped 0.96 percent to 10,500 won.

Meanwhile, the Korean won strengthened 1.1 percent this week and rose 0.7 percent yesterday to 1,142.06 per dollar in Seoul, according to data compiled by Bloomberg. The currency weakened 1.1 percent this month, touching a one-year low of 1,162.9 on Tuesday, and fell 3 percent for the quarter.

BY LEE EUN-JOO, BLOOMBERG [angie@joongang.co.kr]