Seoul shares posted their highest close in more than a decade on Friday, as optimism about a broader economic recovery and prospects for better earnings in the second half lifted blue chips such as Samsung Electronics.
Hyundai Heavy Industries Co rose 3.23 percent to 63,900 won after the world's top shipbuilder said its operating profit rose sharply in the latest quarter, overshadowing a fall in net profits, lifting hopes about better second-half earnings.
But some investors cashed in on recent gains after oil prices surged to a fresh record above $66 a barrel, rekindling concerns about the impact of higher energy costs on firm's profits.
The benchmark Korea Composite Stock Price Index (KOSPI) closed up 0.57 percent at 1,130.22, its highest close since ending at 1,138.39 on November 9, 1994.
The main market gained 3.57 percent over the week, bringing it to within sight of the all-time closing high of 1,138.75 struck on November 8, 1994.
South Korea's financial markets will be closed on Monday for a public holiday. "It's not only the domestic economy that's looking better, but also the US and global economies," said Kim Young-ill, head of equity management at KB Asset Management.
South Korea's central bank left interest rates at a record low on Thursday in order to support a recovery in domestic demand, while investors viewed remarks by the Bank of Korea's governor as reflecting a more upbeat outlook for the economy.
Technology stocks led gainers, with Samsung Electronics Co Ltd, the world's top maker of memory chips, rising 1.94 percent to 578,000 won. LG.Philips LCD Co Ltd gained 3.48 percent to 50,600 won.
Other blue chips also gained, with steel maker POSCO rising 1.14 percent to 221,000 won, while department store operator Chinese Co rose 3.38 percent to 382,000 won, after hitting a record 385,000 won.
However, a spike in oil prices to a record high of $66.11 a barrel in electronic trade kept a lid on gains. Shares in some energy cost-sensitive stocks fell, with top local carmaker Hyundai Motor Co down 0.14 percent to 73,700 won, while Highness Semiconductor Inc shed 4.96 percent to 22,050 won.
Among other decliners, SK Telecom Co fell 4.75 percent to 190,500 won as investors unwound from trades linked to the expiry of options on Thursday, dealers said. Shares in the mobile operator rose more than 7 percent in the prior session.
Profit taking pushed Korea Exchange Bank 1.42 percent lower to 10,450 won, despite saying its second-quarter net profit nearly doubled, according to Reuters calculations.
Trade volume reached 407 million shares worth 3.2 trillion won compared to 439 million shares worth 3.2 trillion won on Thursday. Gainers outnumbered decliners by 457 to 284 with 69 titles ending unchanged.
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