Seoul shares closed at a record high on the first trading day of 2011, extending a recent rally with support from large cap issues such as Samsung Electronics Co Ltd. The Korea Composite Stock Price Index ended up 0.93 percent at 2,070.08 points. "Besides expectations over global economic growth, undervalued stock prices compared with earnings will provide further upside ahead," said Woori Investment & Securities market analyst Lawrence Kim.
Foreign investors purchased a net 310.6 billion won ($275.3 million) worth of stocks. Institutions were buyers of a net 105.3 billion won. Kim added that inflows of fresh funds might continue as fund redemptions by fund holders were unlikely because of strong upward momentum.
Technology counters led the market, with bellwether Samsung Electronics Co Ltd marking a record high. The world's No 1 memory chipmaker climbed 0.95 percent. Samsung Group, parent of Samsung Electronics, plans to increase investment sharply this year, Samsung Electronics' chairman told reporters on Monday.
Hynix Semiconductor Inc, the world's No 2 memory chip maker, jumped 5.4 percent on growing expectations that the battered chip sector may bottom out after sharp price falls. "Samsung and Hynix are expected to enjoy a stronger foothold in the global memory chip market this year," said Kim Sung-in, an analyst at Kiwoom Securities. LG Display Co Ltd rose 2.6 percent and LG Electronics Inc gained 1.7 percent.
Banks continued their rebound amid brewing hopes for better earnings this year. KB Financial Group Inc notched a 52-week high, up 3 percent. The South Korean financial firm that runs the country's biggest lender will bolster non-banking business and profitability amid intense competition and increase financial sector regulation, Chairman Euh Yoon-dae said in a New Year speech on Monday.
Woori Finance Holdings Co Ltd ended up 2.6 percent. Automakers added to the market's gain after announcing their December sales figures. Hyundai Motor Co, the country's largest car maker, rose 2 percent and affiliate Kia Motors Corp increased 3.75 percent. Hyundai Motor's December sales advanced 2.8 percent versus a year earlier, while sales at Kia jumped 27.8 percent.
The auto group said earlier that it aimed to boost vehicle sales by 10 percent this year. Shipbuilders offset further gains in the market. Hyundai Heavy Industries Co Ltd fell 1.8 percent. Daewoo Shipbuilding & Marine Engineering Co Ltd, the world's No 2 shipyard, slid 1.51 percent. Samsung Heavy Industries Co Ltd lost 3.6 percent.