Seoul shares rose on Friday on growing optimism about the economy, fuelled by a positive growth estimate for the first quarter from South Koreas central bank, helping shares hit a six-month closing-high. The Korea Composite Stock Price Index (KOSPI) ended up 1.50 percent at 1,336.04 points, posting its fifth consecutive week of gains, the longest weekly winning streak since June, 2007.
"The latest positive economic data and easing financial market fears have boosted both sentiment and liquidity. The main index seems set to retain upward momentum," said Kim Seung-han, a market analyst at HI Investment & Securities.
The Bank of Korea on Friday estimated the countrys gross domestic product for the first quarter expanded a seasonally adjusted 0.2 percent from the previous quarter, when GDP fell 5.1 percent. But the KOSPI cut some of its near-3 percent gains to the session high of 1,355.69 points. "Institutions are booking profits as some uncertainties lie with the long weekend in the United States," said Lee Sun-yeob, a market analyst at Goodmorning Shinhan Securities.
"If US banks show some signs of improvements and stabilisation, the index could make a more meaningful rebound. Better numbers from banks will point to stronger economies in the second half," Lee added. The CBOE Volatility Index, also known as Wall Streets fear gauge, fell to 36.53, the lowest since late September, 2008, hinting investors were more willing to take riskier bets.
Shares in Ssangyong Motor ended 2.7 percent higher despite local media reports on Friday that its union was planning to launch a strike. The news follows the sports utility vehicle makers announcement on Wednesday that it would take bold steps aimed at assuring its survival, including cutting a third of its workforce and selling idle assets.
"Strike or not, Ssangyong will probably go ahead with downsizing, and shares continue to ride higher on cost cutting hopes," said Kevin Lee, an analyst at Goodmorning Shinhan Securities. Banking issues rose after the S&P financial index shot up 15.51 percent after Wells Fargo said on Thursday it expected to post a record $3 billion first-quarter profit, causing its shares to soar 31.7 percent.
Hana Financial Group rose 4.13 percent and Woori Finance Holdings jumped 8.03 percent. Elsewhere POSCO slightly underperformed the benchmark index, edging 1.2 percent higher, ahead of its results scheduled to come out after the closing bell on Friday, and following comments by the company on Thursday that its first quarter operating profit would be slightly lower than analysts average forecast compiled by a domestic research firm.
"Weakness in POSCOs first quarter figures has largely been expected," said Kim Hyun-tae, a market analyst at Hyundai Securities. "The focus now will be on future quarters, and when and by how much POSCO will cut key steel prices as the industry continues to face difficulty."
Institutional investors sold a net 475 billion won worth of shares and foreign investors bought a net 406 billion won. Retail investors bought a net 79 billion won. Advancers led decliners 525 to 300, with 57 finishing unchanged. The KOSPI 200 June futures index rose 3.50 points to 173.90 and the KOSPI 200 spot index ended up 2.53 points at 172.01. The junior Kosdaq market advanced 2.45 percent to end at 493.26 pints.
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