Trade could slow waiting BOK rate decisionSeoul’s main stock market ended 2.1 percent higher yesterday as institutional investors picked up steel and transportation shares, shrugging off overnight losses on Wall Street, analysts said.
The benchmark Kospi climbed 21.59 points to 1,028.13. Volume was moderate at 391.2 million shares worth 3.58 trillion won ($2.43 billion). Gainers outnumbered losers 504 to 301.
“Institutional buying lifted the broader market. Despite the local market’s run, there is still caution among investors against any possible negative news related to tightened credit conditions,” said Park Suk-hyun, an analyst at Eugene Investment and Securities.
Park said the Korean market is likely to trade in a narrow range next week as investors may take a breather ahead of a rate decision by the Bank of Korea and the expiration of options.
Gains by steelmakers and auto shares led the market’s run. Industry leader Posco jumped 5.7 percent on expectations that steel prices may hit bottom.
Carmakers gained ground on the back of reports that the government is considering granting extensive tax cuts to local automakers struggling with weakening domestic and overseas demand. Top carmaker Hyundai Motor rose 5.1 percent and its affiliate Kia Motors advanced 7.1 percent.
Hynix Semiconductor, the world’s second-largest computer-memory maker, climbed 3.6 percent, on the report that its controlling shareholders including Korea Exchange Bank are positively considering financial support for the chipmaker.
Hyosung, which makes transformers, nylon yarns and other synthetic and chemical products, gained 5.7 percent. Samsung Securities raised its share-price target by 6 percent, citing the company’s benefits from a weaker won, falling raw material costs and an improving product mix.
On the other hand, Doosan Corp., the flagship unit of Doosan Group, declined 2.3 percent on reports that it is considering selling its liquor unit.
U.S. stocks closed sharply lower Thursday as dismal economic data pointed to a deepening of the economic recession. The Dow Jones industrial average declined 2.5 percent and the tech-dominated Nasdaq composite index fell 3.1 percent.