Seoul shares rose on Wednesday on hopes that European leaders would bring a more credible debt solution to the table at a key summit on Friday, after S&P warned of possible regional rating cuts in the absence of a convincing plan. "The market got a slight boost from the summit anticipation but otherwise momentum was weak, with quiet movement in overseas markets as well. Where the market goes from here until the weekend will rely wholly on developments in Europe," said Kim Sung-bong, an analyst at Samsung Securities.
The Korea Composite Stock Price Index closed up 0.87 percent at 1,919.42 points. The KOSPI 200 index rose 0.84 percent, while the junior Kosdaq index gained 0.61 percent. European Council President Herman Van Rompuy assured EU leaders that only minor amendments to the EU treaty would be necessary to enable sufficient fiscal oversight to tighten rules on member states' budget deficit and sovereign debt.
Ahead of the summit, the European Central Bank will convene on Thursday for a policy meeting and is widely expected to cut interest rates and introduce long-term liquidity measures to aid the region's embattled financial institutions. Gains were led by financial shares, with Daewoo Securities jumping 4.19 percent and Hyundai Securities rising 3.09 percent.
LG Chemicals tumbled 5.6 percent after dropping by as much as 7 percent on local media reports that it was planning to spin off its battery division. LG Chemical said that no decision on a spinoff had been made. Sam Yang Food spiked almost 15 percent on strong sales of its new line of instant noodle products.
Foreign investors and retailers extended their selling streaks, offloading a net 43.7 billion won ($38.6 million) and 287.8 billion won worth of shares respectively. Institutions remained net purchasers for a tenth consecutive session, snapping up 349.6 billion won worth.
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