SEOUL: Seoul shares held on to moderate gains near midday on Friday, as signs of stabilisation in the euro zone debt crisis rejuvenated investor risk appetite.
"The news out Europe was a significant confidence booster, with steady purchases from both offshore investors and institutions propping up the market," said Park Suk-hyun, a market analyst at KTB Securities.
"Concerns of a possible logjam of sell orders flooding the market today after a quiet options expiration date have subsided, seen unlikely with the US earnings season set to heat up this weekend," he added.
Europe passed a crucial test of confidence after Spanish and Italian bonds drew strong bids on Thursday, helping yields drop sharply and easing the debt pressure on the embattled currency bloc.
On Friday morning, the Bank of Korea held interest rates steady at 3.25 percent for the seventh consecutive month. The widely expected decision had little immediate impact on financial markets.
The Korea Composite Stock Price Index (KOSPI) was up 0.65 percent at 1,876.62 points as of 0200 GMT.
Gains were led by shipbuilders, with Samsung Heavy Industries climbing 3.66 percent and Daewoo Shipbuilding rising 3.2 percent.
Hyundai Heavy Industries bucked the sector trend to fall 0.51 percent after KCC Corp sold its stake in the world's largest shipmaker.
KCC Corp soared 4.5 percent after the company announced via regulatory filing that it was selling $602.2 million worth of shares in Hyundai Heavy at the ceiling of its previously offered price range.
"KCC likely needed the cash to fund its purchase of Samsung Everland, due to be paid for by the end of January. I think we can rule out worries of a possible liquidity crunch because KCC is on a very solid base," said Lee Jeong-heon, an industry analyst at Hana Daetoo Securities.
A KCC media official said no firm decision had yet been made on how to utilise proceeds from the sale.
Shares in Hyundai Home Shopping Network Co rose 5.28 percent after the company announced it would acquire a controlling stake in apparel maker Handsome Corp for 420 billion won ($362.7 million).
Handsome Corp shares jumped 11.45 percent.
Large-cap technology issues also lent support, with Samsung Electronics gaining 1.46 percent while Hynix Semiconductor climbed 3.11 percent.
Offshore investors were net buyers of 70 billion won ($60.4 million) worth of shares while institutional investors snapped up a net 75.4 billion won worth.
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