Seoul shares rose on Wednesday to their highest close in more than six months, approaching a record high, as chip makers such as Samsung Electronics gained after US computer maker Dell's earnings beat expectations.
Some stocks also rebounded from recent sharp falls. Top domestic lender Kookmin Bank gained 2.23 percent to 73,500 won after falling in the prior five sessions.
Kookmin advanced despite a media report that US buyout fund Lone Star may terminate a deal to sell Korea Exchange Bank to Kookmin, as analysts said the risk of such an outcome has been already discounted in shares.
The benchmark Korea Composite Stock Price Index (KOSPI) rose 1.18 percent to end at 1,422.54, marking its highest close since May 12. The index is now within range of its all-time high of 1,464.70 points set on May 11.
Technology shares may lead gains in the remainder of the year, some analysts said, as earnings in the sector are expected to improve on a quarterly basis while worries about first-half profits in 2007 are easing.
Chip makers gained after Dell, the world's second-biggest computer maker, reported on Tuesday quarterly earnings that comfortably beat consensus. Hynix Semiconductor Inc rose 2.29 percent to 35,750 won. Samsung Electronics Co Ltd rose 1.54 percent to 660,000 won. Shares in the world's biggest maker of memory chips have now rebounded 22 percent since a 2006 low in mid-June.
Recently hit shares also recovered, with Hyundai Motor Co gaining 1 percent to 71,000 won after falling 7 percent over the prior four sessions. That had brought the relative strength index of Hyundai, the country's biggest auto maker, down to 23.8 on Tuesday, well below the 30-point level at which a share is seen as oversold.
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