Seoul shares firm

Seoul shares posted a strong rise on Monday in a relief rally following positive news from Italy, with gains led by technology and chemical stocks such as Hynix Semiconductor Inc and Hanwha Chemical. "The market has regained its strong support above the 60-day average as shares recover to pre-Italy crisis levels," said Han Beom-ho, a market analyst at Shinhan Investment Corp.
"But whether the market has the strength to rise meaningfully above the 1,900 points is still to be seen. The market needs convincing signs that Italy is serious about mending its problems, and that Europe will give support," Han added. Foreign investors were buyers of a net 130.5 billion Korean won ($115.8 million) worth of stocks, snapping three consecutive sessions of selling.
Italy's Senate approved economic reforms intended to reverse a collapse of market confidence on Friday, kicking off a rapid transition to end the Berlusconi era and clear the way for an emergency government within days. The Korea Composite Stock Price Index ended up 2.1 percent at 1,902.81, below market's 120-day moving average of around 1,950 points. The KOSPI 200 index ended up 2.17 percent at 248.27, while the junior Kosdaq market rose 2 percent to 510.09.
Technology issues led gains, with Hynix Semiconductor up 3.5 percent after SK Telecom Co Ltd was named preferred bidder for control of the world's No 2 memory chip maker. "Hynix shares are rallying on expectations of SK Telecom's investment in the company," said KB Investment & Securities analyst Byun Han-joon.
"The company had not been able to invest more aggressively due to a lack of funds, but with SK Telecom as its new top shareholder it is likely to be able to." Byun added that investment in nand flash chips was seen likely, which would lead to a visible earnings improvement next year. SK Telecom ended down 0.3 percent. LG Electronics Inc, the world's No 3 handset maker, rose 4.6 percent amid growing hopes of earnings improvement, and LG Display spiked 6.9 percent.
Chemical firms rallied after local media reports of suspension of a large chemical plant in Japan, pointing to potential limited supply of chemicals and competitive benefits for South Korean firms. Shares in Hanwha Chemical jumped 9.5 percent and Honam Petrochemical rallied 6.7 percent. Firm gains in brokerages and refiners gave further support. Woori Investment & Securities Co Ltd rose 3.2 percent buoyed by the market's rally.
Refiners ended higher, helped by a stronger won, which helps lessen the cost of importing crude oil. Shares in SK Innovation climbed 4 percent and S-Oil advanced 3.4 percent. Tourism counters rallied after a Swiss foundation provisionally picked South Korea's Jeju Island as one of "seven new wonders of nature," which could lead to higher tourist traffic for the island. Hana Tour Service Inc advanced 4 percent and Mode Tour Netwrk Inc gained 2.5 percent.