Seoul shares rebound as chipmakers, shipbuilders rally

SEOUL: Seoul shares ended a three-session decline on Wednesday as institutional investors snapped up beaten-down counters despite persisting concern over the European debt situation.

The Korea Composite Stock Price Index (KOSPI) traded 2.88 percent higher at 1,817.64 as of 0130 GMT, after falling 6 percent in the previous three sessions.

Gainers far outnumbered losers by 695 to 124.

"The stock market is rebounding after steep declines in recent days, but the situation has not changed and volatility remains high," said Korea Investment Trust Management fund manager Kim Young-il. "Uncertainty is high about the direction of the US economy, and uncertainty is even higher in Europe as investors are not sure whether the bloc is going in the right direction."

US stocks declined overnight as investors lacked confidence over European efforts to tackle the debt crisis.

Doubts resurfaced about willingness in Italy and Greece to push through austerity measures demanded by their partners, and hardening opposition to further aid in the bloc's paymaster Germany.

While most sectors posted gains, chipmakers, refinery issues, shipbuilders and shippers were among outperformers.

Hynix Semiconductor Inc , the world's second-biggest computer memory chipmaker, jumped 7.4 percent. Bigger rival Samsung Electronics Co Ltd rose 4.1 percent.

Daewoo Shipbuilding & Marine Engineering Co Ltd climbed 5.5 percent, leading the sector's advance, after the shipbuilder said on Wednesday that it had won a $1.1 billion deal to build two submersible drilling rigs from Norway's Songa Offshore SE .

Refiners gained ground, with SK Innovation up 5.9 percent.

Shippers also rose after the Baltic Exchange's main sea freight index or BDI, which tracks rates to ship dry commodities, rose to its highest in nearly nine months on Tuesday. . Hanjin Shipping Co Ltd gained 5.8 percent, while STX Pan Ocean Co Ltd was up 5.4 percent.

Among small-caps, Ahnlab Inc plunged by the daily limit of 15 percent after rallying strongly for three consecutive sessions, after board chairman and biggest shareholder Ahn Chul-soo said on Tuesday that he would not run in the upcoming Seoul mayoral race.

In contrast, Pulmuone Holdings Co Ltd extended its rally, and was up as much as 15 percent after Ahn threw his weight behind Park Won-soon, an outside director of the food company.

Copyright Reuters, 2011