SEOUL: Seoul shares rebounded on Tuesday morning, outpacing Asian peers after a marked decline on Monday and boosted by signs of policy easing in China, but investors remained cautious ahead of euro zone bond auctions that will gauge the region's debt pressure.
"Persistent, underlying fears of Europe aside, subdued sentiment received a bit of encouragement on signs of policy easing and hopes of a bank reserve ratio cut in China," said Lee Jae-man, an analyst at Tong Yang Securities.
Chinese banks ratcheted up lending in the last month of 2011 on the back of stronger money supply, reinforcing perceptions the central bank is gently easing policy to cushion the impact of the global economic slowdown.
The Korea Composite Stock Price Index (KOSPI) was up 1.7 percent at 1,857.49 points as of 0250 GMT.
Early gains were led by shipbuilders, with Hyundai Heavy Industries up 2.93 percent while STX Offshore & Shipbuilding rose 4.23 percent.
Brokerage firms lent support, with Woori Investment & Securities soaring 4.25 percent and Mirae Asset Securities gaining 2.26 percent.
Shares in LG Display rose 4.12 percent after the flat-screen manufacturer said it saw improved business conditions ahead and denied market speculation that it was planning a new rights offer.
Ssangyong Motor Co surged for a third consecutive session, soaring by the daily 15 percent limit on hopes of strong backing from parent Mahindra and Mahindra Ltd .
Biotech firm RNL Bio Co Ltd, saw its shares jump 9.51 percent after it said in a filing it had obtained a patent in Singapore for a stem cell-based treatment.
OCI Corp bucked the trend, retreating 0.45 percent after it reported a cancellation of $343 million worth of orders following the bankruptcy filing of one of its US clients.
Halla Engineering & Construction Co plummeted 8.86 percent after it announced a decision to issue 100 billion won worth of new shares.
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