SEOUL: Seoul shares edged up on Wednesday as sentiment was lifted by reports of an agreement to strengthen the euro zone's rescue fund, but caution still ruled after Moody's cut Spain's sovereign ratings by two notches.
"(There are) encouraging signs on the rescue fund front, but Spain's ratings downgrade is reason for caution...the market's trading range will be limited," said Y.S. Rhoo, a market analyst at Hyundai Securities.
Britain's Guardian newspaper reported on Tuesday that France and Germany had agreed to boost a euro zone financial rescue fund to 2 trillion euros ($2.76 trillion).
Moody's Investor Service on Tuesday cut Spain's sovereign ratings by two notches, saying high levels of debt in the banking and corporate sectors leave the country vulnerable to funding stress.
Foreign investors were sellers of a net 59.2 billion won ($51.7 million) worth of stocks, poised to snap four sessions of buying, while pension funds were buyers of a net 9.8 billion won, set to purchase stocks for a 10th straight session.
The Korea Composite Stock Price Index (KOSPI) was up 0.39 percent at 1,846.06 points as of 0131 GMT.
Hyundai Motor Co and affiliate Kia Motors Corp posted firm gains amid positive expectations over their quarterly earnings.
Local media reported the companies had raised their combined sales goal for next year in the United States and Europe by 2 million vehicles, citing industry sources.
Hyundai Motor is expected to report 1.91 trillion won in third quarter net profit, according to ThomsonReuters I/B/E/S, compared to 1.35 trillion won a year ago.
Shares in Hyundai Motor rose 2.1 percent, and Kia climbed 3.8 percent.
But falls in technology issues and banks weighed. KB Financial Group lost 1.6 percent and Woori Finance Holdings declined 2.4 percent.
Shares in LG Electronics shed 1.2 percent and Hynix Semiconductor dropped 1.4 percent.
Hyundai Heavy Industries fell 1.4 percent and Daewoo Shipbuilding & Marine Engineering lost 2 percent.
Refiners were lifted as the won stabilised in Wednesday trade, pointing to steadier imported crude costs.
Shares in SK Innovation , South Korea's top refiner, were up 0.6 percent and GS Holdings , the holding company of No.2 refiner GS Caltex, gained 0.8 percent.
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