Seoul shares edged up on Tuesday, in spite of falls for key exporters, thanks to gains by defensive stocks and buying by pension funds. While the Seoul market likely will stay in a narrow range for some time, "the good news is it has pretty firm support at the current level," said Ko Seung-hee, a market analyst at SK Securities.
South Korea's 12-month forward price earnings multiple was 9.4 compared with Taiwan's 14.7 and Japan's 14.6, Thomson Reuters StarMine data showed. On Tuesday, pension funds were buyers of a net 90.6 billion won worth of stocks, purchasing stocks for a fifth consecutive session. "This is a good sign," Ko said. "Pension funds are long-term investors."
The Korea Composite Stock Price Index ended up 0.32 percent at 1,986.22 points. Shares in Korea Electric Power Corp (KEPCO) fell 3.2 percent after South Korea suspended the operations of two nuclear power reactors and extended the shutdown of a third for maintenance to replace cables supplied using fake certificates.
Nuclear reactors are run by Korea Hydro and Nuclear Power Co Ltd, which is owned by state-run KEPCO. Telecommunication and domestic consumption sector plays outperformed as investors favoured defensive trades. Shares in SK Telecom, South Korea's biggest wireless carrier, rose 0.9 percent and LG Uplus, the country's third-biggest, advanced 1.7 percent. Lottefood climbed 2.6 percent.
Hyundai Motor shares ended off 0.2 percent and Kia Motors fell 1.2 percent. Companies with factories in the closed Kaesong industrial zone rallied after North Korea's state news agency said the communist state was prepared to open talks on normalising the border complex's operations. Shares in Romanson spiked 7.2 percent and Shinwon gained 2.1 percent. The KOSPI 200 benchmark of core stocks ended up 0.15 percent, while the junior KOSDAQ rose 1.42 percent.
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