Markets

Seoul shares rise sharply; financials bounce

SEOUL : Seoul shares extended gains on Friday, led by banks and brokerage issues as coordinated efforts by major centr

Published September 16, 2011 Updated September 16, 2011 04:31am

2 min

By Shoaib Ur Rehman

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Foreign investors turned net buyers following an eight-session selling streak, while institutional investors lent the market further support.

The Korea Composite Stock Price Index (KOSPI) was up 3.34 percent at 1,833.29 points as of 0243 GMT, set to finish the week slightly higher after falling 2.9 percent the previous week.

"I expect shares to extend their rebound next week as expectations will grow for policymakers to tackle the Greece debt crisis and fears of a US double-dip," said Kim Joo-hyung, chief strategist at Tong Yang Securities.

Financial issues rallied after falling sharply the previous session, tracking their US and European peers after news that top central banks will coordinate a plan to ease dollar funding for stricken European banks.

Woori Finance Holdings jumped 6.9 percent while Hana Financial Group rose 6.1 percent.

Investors also snapped up beaten-down brokerage issues, with Woori Investment & Securities rallying 9 percent and Samsung Securities gaining 6.2 percent.

Hyundai Motor advanced 5 percent and parts affiliate Hyundai Mobis jumped 7.7 percent.

GS Engineering & Construction Corp firmed 6 percent and led gains in the sector after the builder said it had won a 603 billion won ($540 million) project from Kuwait Oil Company.

Tech stocks gained, with top company Samsung Electronics up 4.4 percent and LG Display trading 5.8 percent higher.

Nomura forecast in a report on Friday Samsung Electronics' operating profit for the third quarter would "come in substantially higher than the market's lowered expectation as growth in smartphone and its related components should be higher than the market's consensus."

"We believe the DRAM and LCD businesses, which have been trending downward since 2H10, have limited downside from here," the brokerage said.

Bucking the market trend, shares in Kolon Industries extended their slide, falling 7.9 percent, after a US federal jury ordered the South Korean firm to pay $919.9 million in damages to DuPont .

Companies involved in the smart grid business surged by the daily limit after electricity shortages caused widespread blackouts across South Korea.

"The smart grid technology helps store power that can be used in an emergency. If (state utility) KEPCO had stored surplus electricity, there would have been no big confusion yesterday," said Han Seul-kee, an analyst at Woori Investment & Securities.

Shares in Nuri Telecom , PS Tec and Omnisystem all shot up 15 percent.

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