South Korean shares rose on Wednesday, led by exporters such as flat panel maker LG.Philips LCD, after oil prices fell sharply from record levels and a gauge of U.S consumer confidence jumped to a three-year high. Caution ahead of the Federal Reserve's two-day policy-setting meeting ending on Thursday tempered the gains.
The benchmark Korea Composite Stock Price Index (KOSPI) rose 0.44 percent to end at 999.08.
"Despite the good news, the market has to look ahead where we are facing second-quarter earnings that are not likely to be good, and a Fed meeting this week," said Kim Sung-ki, a fund manager at Chohung Investment Trust Management.
Flat panel maker LG.Philips LCD Co Ltd rose 0.53 percent to 47,150 won, while Hynix Semiconductor Inc. gained 2.13 percent to 16,750 won.
A drop in the South Korean won to its weakest level in over four months against the dollar also helped lift exporters.
Steel makers rose amid reports China's steel exports were slowing. POSCO Co Ltd, the world's fifth-biggest steel maker, rose 0.55 percent to 181,500 won.
Market hopes for a recovery in consumer demand were also lifted after data showed the wholesale and retail sales index in May's industrial output rose 0.6 percent from the previous month, following a revised 0.3 percent fall in April.
Hyundai Department Store Co Ltd rose 1.79 percent to 48,400 won.
Dong-a Pharmaceutical Co surged 6.55 percent to 47,200 won, extending a rally in the sector on the back of expectations for improved earnings.
South Korea's junior and tech-heavy Kosdaq market rose 0.97 percent to finish at 497.63, its highest close in nearly four months, led by Internet stocks amid market talk of merger and acquisitions in the sector. Internet portal and search engine operator NHN Corp. surged 3.48 percent to 106,900 won.
But among decliners, KT Corp., the top local fixed-line and broadband provider, fell 1.86 percent to 42,100 won after South Korea's government said on Tuesday it had tightened control of KT to cool heated competition in the sector.
The fall in crude oil prices hit oil refiners, with SK Corp down 1.62 percent to 55,100 won.
Trade volume reached around 407 million shares worth 2.5 trillion won compared with 430.6 million shares worth 2.5 trillion won on Tuesday. Gainers edged out losers by 492 to 228 with 74 titles ending flat.
Foreign investors sold a net of 56.2 billion won in shares on the main bourse, data at 0636 GMT showed. Retail investors sold a net of 135.3 billion won. Institutional investors bought a net of 124.3 billion won. The September KOSPI 200 futures index rose 1 point to 128.90 and the underlying KOSPI 200 spot index gained 0.49 point to 128.41.
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