Seoul shares up

Seoul shares ended up 0.8 percent after a roller coaster Monday, helped by last-minute buying from pension funds, as selling from jittery investors offset an initial boost from a shock 75-basis point domestic rate cut. The Bank of Korea delivered its biggest ever interest rate cut at an emergency meeting on Monday and promised other measures to spur up tumbling markets and the weakening economy.
The market spiked briefly after the rate cut, but the benchmark KOSPI dropped 5 percent in the afternoon to below 900 points for the first time since January 2005, as shell-shocked investors returned to scrambling to cash out of equities.
The Korea Composite Stock Price Index finished up 0.82 percent at 946.45 points, ending the market's losing streak in the previous four sessions. The index is down 35 percent so far in October and worth half what it was at the end of 2007. "A sense of panic is still ruling the market," said Kim Seung-han, an analyst at HK Investment & Securities. "It comes from the falling won and widening risk premium over Korean debt, over which the Bank of Korea has little control."
The central bank's measures failed to win confidence that the global market meltdown and local credit squeeze were nearing an end, analysts said. "The rate cut only confirmed the authorities' will to cope with the market turmoil," said Park Sung-hun, an analyst at Woori Investment & Securities. "Investors want to see how global economies such as the US come up with broader stimulus measures and how markets react."
Select blue chips rose on pension buying, with Samsung Electronics jumping 7.5 percent and Hyundai Motor climbing 10.5 percent. But overall decliners led gainers by far at 709 to 164, with 25 titles ending flat.
Banks also rallied on expectations that the rate cut would help improve funding conditions. Woori Finance Holdings rose 11.6 percent and KB Financial Group climbed 8.7 percent. Kia Motors Corp rose 7.6 percent on hopes for a sales boost from new models and the weaker won.
But telecom stocks, which had outperformed as defensive plays, fell with top mobile operator SK Telecom falling 3.6 percent. Hanwha Corp dropped by daily limit 15 percent for the second day in a row after its parent Hanwha Group was picked on Friday as the buyer for Daewoo Shipbuilding & Marine Engineering amid the weakening outlook for the shipbuilding industry.