Market rebounds after two lousy days

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Market rebounds after two lousy days

Korean shares rebounded slightly yesterday thanks to eased fears of currency crises developing in emerging markets and better indicators for the U.S. economy.

The benchmark Kospi rose 4.47 points to 1,891.32, up 0.24 percent from the previous day.

Yesterday’s recovery was largely attributed to a higher-than-forecast manufacturing orders index in the United States in December and a falling deficit estimate for this year.

Although foreign investors continued their selling spree for the third consecutive day this week, the size of sell-offs was reduced. They sold 289 billion won ($268 million) worth of local shares yesterday.

Construction and transportation equipment shares led the overall market rally, according to the Korea Exchange.

Construction shares climbed 2.7 percent, transportation equipment shares went up 1.4 percent. Retail shares also rose 1.1 percent. On the other hand, electronics shares retreated 0.7 percent.

Samsung Electronics saw a 0.96 percent fall to 1.24 million won per share. Posco dropped 0.17 percent to 289,500 won. Hyundai Motor rose 1.11 percent to 228,500 won. Hyundai Mobis jumped 4.06 percent to 307,500 won. SK Hynix inched up 0.41 percent to 36,650 won. Naver advanced 3.45 percent to 689,000 won. SK Telecom dropped 1.45 percent to 204,500 won. KT went down 0.82 percent to 30,350 won.

Lotte Shopping rose 3.01 percent to 376,500 won.

Korea’s won advanced for a second day as a global emerging-market sell-off abated, boosting demand for riskier assets.

“Concerns about the outlook for emerging markets are easing, and the stock market rebound is supporting the won,” said Jeon Seung-ji, an analyst of exchange rates at Samsung Futures in Seoul.

The won climbed 0.5 percent to 1,077.91 per dollar at the close in Seoul, according to data compiled by Bloomberg. One-month implied volatility, a gauge of expected moves in the exchange rate used to price options, fell 29 basis points, or 0.29 percentage point, to 7.90 percent.

The yield on Korea’s 3 percent government bonds due December 2016 fell one basis point to 2.85 percent, according to Korea Exchange prices.


BY SONG SU-HYUN, BLOOMBERG [ssh@joongang.co.kr]

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