Seoul shares surge

Seoul shares posted on Monday their biggest daily gain in 5-years after the Federal Reserve cut a key lending rate, easing some, but not all, fears about the impact of tighter credit on the global economy.
Financials such as Samsung Securities Co surged by the daily limit, while exporters such as LG.Philips LCD Co Ltd also gained in a day in which 780 shares gained and only 46 fell.
The rebound comes after the main index slumped 10.4 percent last week - its worst week since mid-September 2001 - as part of a rout in global markets, but analysts urged investors to stay cautious. The KOSPI is still down 14.1 percent since a record 2,015.48 points on July 26, as a crisis in the US subprime mortgage sector had led to a credit squeeze and raised concerns about losses at funds.
"This is not a good time to buy shares. We still need to see whether liquidity into markets improves. It's better to wait until the volatility comes down," said Kim Yung-min, a fund manager at Jeil Mutual Savings Bank.
The benchmark Korea Composite Stock Price Index (KOSPI) rose 5.69 percent to end at 1,731.27 points, bouncing back from its lowest close since May 21 on Friday. The gains were the KOSPI's strongest since a 7.6 percent surge on February 14, 2002, prompting the Korea Exchange to suspend programme trading for five minutes in the morning, following a surge in futures prices.
The KOSPI is now up 20.7 percent for the year. Wall Street surged on Friday after the Fed cut a key bank lending rate and signalled a willingness to take more dramatic action to cushion the world's largest economy from tightening credit.
Financials tracked global peers higher, with Samsung Securities Co surging by the daily limit of 15 percent to 75,200 won, while Daewoo Securities Co gained 14.62 percent to 29,400 won. Korea Exchange Bank rose 7.31 percent to 13,950 won after HSBC Holdings said it was in talks to buy a majority stake in the South Korean lender from US fund Lone Star.
Exporters also gained on optimism that the increased availability of credit will keep global economic growth intact. LG.Philips LCD rose 4.49 percent to 41,900 won, while Samsung Electronics Co Ltd added 3.15 percent to 590,000 won.
Recently beleaguered blue chips staged a broad recovery as well, with steel maker POSCO Co Ltd up 7.64 percent to 479,000 won, while Hyundai Heavy Industries Co rose 7.91 percent to 300,000 won. The junior and tech-heavy Kosdaq market surged 7.14 percent to finish at 721.59, its biggest gain since a 7.45 percent jump on September 18, 2001.
Foreign investors sold a net 369.1 billion won ($388.5 million) in the main KOSPI, extending a recent heavy selling streak. Institutional investors sold a net 170 billion won, but retail investors bought a net 553.6 billion won. Trade volume reached 363.8 million shares worth 6 trillion won compared to 493.2 million shares worth 7.4 trillion won on Friday. The September KOSPI 200 futures index surged 12.90 points to 220.40, while the underlying KOSPI 200 spot index advanced 11.15 points to 219.72.