Seoul shares extend gains

Seoul shares rose for a second session on Wednesday, as steel makers such as POSCO and banks continued to recover from a slump in global markets on belief they had fallen too much compared with their earnings potential.
Foreign investors helped support markets, ending the session buying a net 48.9 billion won ($51.63 million) worth. That has led to some hopes they will resume buying South Korean stocks after they had sold a net $1 billion worth of shares during the past four sessions.
But exporters ended mixed, amid uncertainty about whether stability will return to global stocks following the steep correction and on differing views about the US economy. The benchmark Korea Composite Stock Price Index (KOSPI) rose 0.57 percent to end at 1,410.95 points.
The KOSPI has now gained 2.5 percent over the past two sessions, although it is far off the February 26 record close of 1,470.03 touched before shares plunged 6.4 percent in a four-session dive.
"There's no crisis in financial markets. The global economy is still healthy, and fundamentals on the corporate side are still the same. The only problem that we've seen is in the liquidity side," said Kim Tae-hong, a senior fund manager at Mirae Asset Investment Management. However, some analysts caution about potential problems in the near-term, including a continued risk aversion to stocks and intensifying worries about the US economy after data on Tuesday showing US factory orders dropped, while an index of home sales fell.
Banks and steel makers rose on Wednesday as investors saw losses as overdone, given expectations for improving earnings this year. Investors also saw the shares as undervalued compared to regional peers. Kookmin Bank, the country's biggest bank, rose 1.08 percent to 84,100 won, bringing its gains over the past two sessions to 3.8 percent.
POSCO Co Ltd, the world's no.3 steel maker, rose 2.29 percent to 358,000 won, a day after surging 5.1 percent, as investors remain optimistic that profits at POSCO would improve amid higher steel prices and cost-cutting efforts.
Among other gainers, Daewoo Engineering & Construction Co Ltd surged 5.57 percent to 18,950 won following media reports the builder was considering buying back shares for cancellation or conducting a capital reduction. But some exporters fell, with Hyundai Motor Co ending down 0.44 percent at 68,500 won.