SEOUL: Seoul shares advanced to their highest in more than six weeks in morning trade on Monday, buoyed by positive South Korean and Chinese economic data, though concerns about global weakness capped gains.
The Korea Composite Stock Price Index KOSPI) stood 0.36 percent higher at 1939.77 points as of 1104 GMT, off an early high of 1,944.75 that marked its highest intraday level since Oct. 19.
Investors were encouraged by South Korea posting its first back-to-back growth in exports for the year last month while the country's manufacturing sector shrank at a slower pace than in October.
Sentiment was also buoyed by China's official manufacturing purchasing managers' index rising to a seven-month high of 50.6 in November from 50.2 in October.
Foreign investors were buyers, while institutional selling weighed on the index.
"I don't expect the upward trend to be sustainable," said Laurence Kim, an analyst at Woori Investment & Securities.
The recent economic data from the United States and China have been good, but the US economy may have peaked and the rebound in China will be modest, he said.
Eyes are on a string of US economic indicators to be released this week, including the Institute for Supply Management's reading of the manufacturing sector on Monday and the US government's November jobs report on Friday.
"On top of the euro zone risk and the US fiscal cliff, US economic data could be worse-than-expected and weigh on the stock market," Kim said.
With barely a month left before the "fiscal cliff," Republicans and Democrats remained far apart on Friday in talks to avoid the across-the-board tax hikes and spending cuts that threaten to throw the world's biggest economy back into recession.
The KOSPI showed muted response to an announcement by North Korea over the weekend that it would carry out its second rocket launch of 2012. But defense-related stocks rallied, with Victek and Speco jumping by the daily limit of 15 percent.
The automobile sector gained ahead of the planned announcements of November global sales by automakers later on Monday, with Hyundai Motor firming 1.8 percent and Kia Motors rising 1.8 percent.
Although construction shares lost across the board, Samsung C&T Corp managed to rise 0.3 percent after it announced it won a $596 million order to build a power plant in Penang, Malaysia from the Energy Commission of Malaysia.
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