SEOUL: Seoul shares rose firmly on Friday after Greece backed away from a proposed referendum that threatened its membership in the euro and the European Central Bank cut interest rates.
"The market's deepest fears have eased significantly thanks to overnight developments in Europe, and it looks set for a bear rally," said Lee Kyoung-soo, a market analyst at Shinyoung Securities.
Intense European pressure forced debt-stricken Greece to seek political consensus on a new bailout plan instead of holding a referendum after EU leaders raised the prospect of a Greek exit from the euro to preserve the single currency.
The European Central Bank cut interest rates by a quarter point to 1.25 percent in a surprise move on Thursday.
Institutions turned net buyers, purchasing a net 137.8 billion won ($122 million) worth of stocks.
The Korea Composite Stock Price Index (KOSPI) was up 2.41 percent at 1,915.03 points as of 0110 GMT.
LG Electronics rebounded but underperformed after the firm announced late on Thursday a $945 million rights issue, confirming market rumours that prompted its shares to plunge in the previous session.
"It's good that LG Electronics is not raising money for a Hynix buyout or affiliate funding [as rumoured], but given that its balance sheet is still sound, the rights offer came as a surprise," Hyundai Securities analyst Baek Jong-suk said in a note on Friday.
"We advise a conservative stance on LG Electronics," Baek added, lowering the target price on the world's No.3 handset maker to 80,000 won from the previous 87,000 won.
LG Electronics shares were up 0.65 percent at 62,000 won. Its affiliates saw sharper rebounds after steep losses in the previous session, with LG Corp up 3.2 percent and LG Display jumping 5.1 percent.
Samsung Electronics gained 3.4 percent to 1 million won, touching that milestone for the first time in nine months and flirting with a previous all-time high of 1.014 million won hit in late January.
Crude oil refiners jumped on the won's strength, which tends to reduce the cost of importing crude oil.
S-Oil , the country's No.3 crude oil refiner, rose 5.2 percent and SK Innovation , the No.1, jumped 6.5 percent.
Shipyards also advanced, with Hyundai Heavy Industries gaining 3.9 percent and Samsung Heavy Industries climbing 4 percent.
Defensive issues underperformed as appetite for safer assets cooled.
KT&G , a tobacco and ginseng manufacturer, fell 2.1 percent and Lotte Chilsung , a beverage maker, shed 0.1 percent.
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