Seoul stocks rose to their highest close in over a decade on Monday, as hopes for strong quarterly earnings lifted Kookmin Bank and other financials, while easing concerns about the impact of China's yuan revaluation boosted exporters.
Hynix Semiconductor jumped 10.46 percent to 22,700 won, its highest close in over three years, after a Japanese media report Tokyo had delayed a decision on imposing duties on its chips and amid hopes for a recovery in chip prices.
SK Telecom Co rose 0.8 percent to 188,500 won after it reported a 56 percent jump in quarterly net profit. The firm also said SK Corp, its top shareholder, would sell $1.05 billion of shares in SK Telecom by early August.
The benchmark Korea Composite Stock Price Index (KOSPI) closed up 1.44 percent at 1,089.70, its highest close since ending at 1,095.97 on November 23, 1994.
"There are expectations second-quarter results for lenders and other financial services providers will be strong, with earnings likely to be good in the second half as well," said Kim Sung-ki, a fund manager at Chohung Investment Trust Management.
"This is a bullish market. Every dip is seen as a buying opportunity, and that makes it hard for shares to fall."
Top local lender Kookmin Bank rose 4.06 percent to 51,300 won ahead of its quarterly results due out on Friday.
Samsung Securities upgraded its recommendation on Kookmin to "Buy" from "Hold" last week, noting it expected a positive earnings surprise due to a recovery in asset quality and robust growth in fee income among other factors.
Woori Financial Group, the third-biggest local financial services provider, rose 6.67 percent to 12,000 won.
Department store operators also gained amid expectations for a recovery in consumer demand in the second half. Hyundai Department Store Co rose 8.36 percent to 59,600 won, after earlier hitting a record high of 60,300 won.
Local news provider Money Today reported South Korea's No 2 department store operator planned to open its first local discount store in January 2008.
Major exporters also rose, recovering from sharp losses on Friday when the South Korean won strengthened following China's revaluation of its yuan currency.
Hyundai Motor Co, South Korea's top auto maker, rose 0.92 percent to 66,000 won. Power provider Korea Electric Power Corp rose 3.91 percent to 37,200 won, with analysts noting it would stand to benefit from further revaluations of the yuan currency, as a stronger won cuts the costs of oil imports.
South Korea is the world's fourth-biggest buyer of crude oil and has to import all of its crude needs.
LG Petrochemical Co Ltd rose 2.17 percent to 25,900 won after saying its net profit rose 44.5 percent in the second quarter to 52.4 billion won from a year earlier.
The junior Kosdaq market rose 1.43 percent to 528.95, led by Internet shares such as NHN Corp.
Trade volume reached around 636 million shares worth 3.1 trillion won compared to 684.9 million shares worth 4 trillion won on Friday. Gainers nearly doubled decliners by 487 to 258 with 61 titles ending flat.
Foreign investors sold a net 38.4 billion won in shares on the main bourse, data at 0630 GMT showed. Retail investors sold a net of 218.7 billion won. Institutional investors bought a net of 163.3 billion won.
The September KOSPI 200 futures index rose 1.85 points to 141.10 and the underlying KOSPI 200 spot index gained 2.18 points to 140.55.
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