Seoul shares start Sept higher, foreign buying accelerates

SEOUL: Seoul shares kicked off the new month on an upbeat note on Thursday after posting their worst monthly loss since the global financial crisis in August, with foreign investors stepping up buying.

South Korea's top 10 firms in terms of market capitalisation rose across the board, led by massive buying by Nomura.

The Korea Composite Stock Price Index (KOSPI) , which underperformed its Asian peers last month, rose 2.12 percent to 1,919.90 points, compared with a 1.59 percent gain in the MSCI Asia Pacific ex-Japan index as of 0230 GMT.

Sentiment turned dramatically in recent days on expectations the US Federal Reserve will again intervene to support the economy.

"Foreign investors are continuing buying today after US policy expectations have lifted overseas stocks," said Lawrence Kim, an analyst at Woori Investment & Securities.

"There are a number of events and data due in September which could raise uncertainty."

Samsung Electronics , the most valuable South Korean firm, soared 3.9 percent, while second-ranked Hyundai Motor advanced 2.7 percent ahead of its sales report due in the afternoon.

While most sectors gained, shipbuilding firms, shippers and steelmakers were among the best performers, whereas the food and beverage index bucked the trend, falling.

Shipper STX Pan Ocean rallied 5.5 percent after the Baltic Exchange's main sea freight index , which tracks rates to ship dry commodities, jumped to its highest in nearly eight months on Wednesday.

Automobile, chemicals and refining issues also continued their gains.

Shares in Hanwha Chemical were up 3 percent, while SK Innovation firmed 2.4 percent.

Shares in two affiliates of CJ Corp were weak after the conglomerate said that it would sell its 543.5 billion won stake in Samsung Life Insurance Co Ltd to the units.

CJ Cheiljedang Corp lost 3.5 percent, while CJ O Shopping Co Ltd underperformed the market with a 0.9 percent rise.

In contrast, shares in Samsung Life jumped 5.7 percent as CJ's move helped lift stock overhang, analysts said.

"As the market already was expecting the sale to take place prior to Sept 3, this should be neutral to sentiment, and may even provide short-term relief given the overhang," Goldman Sachs said in a report.

Copyright Reuters, 2011