Seoul shares posted their highest close in 10-and-a-half years on Monday, as key exporters rose on positive US economic data, while Hyundai Group firms surged on news of its plans to expand its tourism business in North Korea. But gains were capped as SK Corp fell sharply after Sovereign Asset Management sold its entire stake in the refiner, while LG Electronics Inc also dipped after reporting a larger-than-expected fall in quarterly profits.
The benchmark Korea Composite Stock Price Index (KOSPI) closed up 0.27 percent at 1,062.43, its highest close since ending at 1,068.94 on December 7, 1994.
North Korea agreed to expand its fledgling tourism operations in the communist state, funded by Hyundai Group, by opening more cities to outsiders from August, Hyundai said on Sunday.
"Investors believe Hyundai Group affiliates could benefit from increased tourism to North Korea, so those shares rose, helping drag the market higher," said Choo Hee-yeop, deputy general manager of asset management strategy at Korea Investment and Securities.
"But there's also a bit of fatigue building after recent sharp gains, and we could be entering a week of boxed-range trading," he added.
Hyundai Merchant Marine and Hyundai Elevator Co Ltdboth surged by a daily permissible 15 percent limit to 18,600 won and 59,300 won respectively. Hyundai Engineering and Construction Co gained 3.99 percent to 28,650 won.
Major exporters to the US market also rose, tracking gains on Wall Street on positive US economic data, with Samsung Electronics Co Ltd gaining 1.29 percent to 549,000 won, its highest close since ending at 555,000 won in May 2004.
The latest US data showed a larger-than-expected jump in industrial production in June, and tame back-to-back inflation readings on US consumer and producer prices.
On the downside, LG Electronics fell 0.88 percent to 67,900 won, wiping out earlier gains, after it reported a larger-than-expected 69.5 percent drop in its quarterly profits.
SK Corp dropped 4.74 percent to 50,200 won on news that Dubai-based investment fund Sovereign had sold its entire $900 million stake in the top local oil refiner.
Asiana Airlines Inc dropped 2.26 percent to 4,550 won after it was forced to cancel some of its domestic flights on Monday amid a strike by unionised pilots.
South Korea's junior and tech heavy Kosdaq market rose 0.49 percent to finish at 527.18, its highest close in two years. Foreign investors turned net sellers, snapping a 12-session buying spree, further capping the market's gains.
Trade volume reached some 480 million shares worth 2.7 trillion won compared to 567.8 million shares worth 3.1 trillion won on Friday. Advancers edged out decliners by 369 to 359 with 74 titles ending flat.
Foreign investors sold a net 29.6 billion won on the main bourse, data at 0653 GMT showed. Retail investors bought a net 43.6 billion won and institutional investors sold a net 98.1 billion won. The September KOSPI 200 futures index edged up 0.25 point to 137.00 and the underlying KOSPI 200 spot index gained 0.30 point to 136.78.
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