Seoul shares soar

Seoul stocks gained 0.58 percent on Monday, led by financial and industrial companies, as a stronger won and stabilising commodities prices boosted market sentiment, encouraging investors to pick up beaten down shares. Monday's gains were fuelled by foreign investors who bought a net 39.67 billion won worth of shares listed on the main board, their second straight session of buying.
Financials such as Kookmin Bank and Shinhan Financial Group gained, with Kookmin up 2.04 percent at 55,000 won and Shinhan up 4.03 percent at 51,600 won. "In the mid-to-long term, banks are good buys as their downside risk is limited," said Jason Yu, head of research at Samsung Securities. "The pace of deterioration in net interest margins is expected to slow from the second quarter." "Banking shares should perform better in the second half from the first on the back of a stronger earnings outlook and M&A interest," Yu added.
Steelmakers such as POSCO and Hyundai Steel also gained on expectations that falling commodities prices will help boost the sector's profitability. POSCO advanced 1.31 percent to 464,000 won and Hyundai rose 1.19 percent to 68,300 won.
"The fact that the won strengthened against the dollar today, coupled with softer commodities prices, helped lift beaten down shares like steelmakers that are sensitive to importing costs of materials," said Jason Hwang, a market strategist at Woori Investment & Securities.
The South Korean won rose 0.7 percent to a 10-day high against the dollar on Monday thanks to diminishing credit worries. The Korea Composite Stock Price Index closed up 0.58 percent at 1,655.30 points. Oil refiners rose after Opec's president said he expected steady oil prices for the rest of 2008, raising hopes of improved margins. The fall in crude prices over the last few sessions, after rapid gains in recent weeks, was expected to help alleviate the burden of crude costs, helping refining margins, analysts said.
"The stronger won and declining crude prices, combined with slowly recovering demand for Bunker-C from China, have been positive for local refiners," said Lee Kwang-hoon, an analyst at Goodmorning Shinhan Securities. SK Energy advanced 1.45 percent to 105,000 won. S-Oil, its smaller rival, ended off its high after news that operations at its domestic refinery had stopped due to a power outage.
S-Oil rose 0.97 percent to 62,400 won. DC Chemical gained 5.92 percent to 358,000 won after the company won a 635 billion won order to supply polysilicon, a key raw material in solar power generation, to China's Wuxi Suntech Power Co. Foreign investors bought a net 39.21 billion won worth of shares listed on the main board. Domestic institutions bought a net 28.86 billion won, and retail investors sold a net 99.43 billion won worth.
Advancers outnumbered decliners by 451 to 303, with 113 titles ending unchanged. Trade volume stood at 254.5 million shares worth 3.76 trillion won, compared with 279.05 million shares worth 4.35 trillion won on Friday. The KOSPI 200 June future gained 1.25 points to 212.80 and the KOSPI 200 spot index rose 1.31 points to 211.00. The junior Kosdaq market rose 0.60 percent to 619.60.