Seoul shares hit seven-month high

Seoul shares rose 2 percent on Monday, hitting a fresh seven-month high, as financial stocks rallied and the won's strength fuelled interest in sectors that had been pounded by currency risks. Shipbuilders rose on expectations that the battered industry was nearing a bottom while retail stocks jumped on signs of reviving consumption.
While the market had gained 41 percent since its low in early March, the rally was justified by continuing foreign fund inflows and an expected recovery in corporate earnings, analysts said. Government data on Friday showed South Korean exports fell less than expected in April and export earnings per day rose for the third month in a row.
The Korea Composite Stock Price Index rose 2.09 percent to end at a session high of 1,397.92 points, the index's highest since October 2. KB Financial Group, which runs South Korea's biggest lender Kookmin, jumped by daily limit 15 percent, the first time since late November, after it reported better-than-expected quarterly earnings.
Woori Finance Holdings climbed 10.4 percent, while Shinhan Financial Group rose 7.3 percent, although Shinhan trimmed some gains after reporting a first-quarter profit below forecasts. Brokerages advanced on expectations of strong earnings in the current quarter with stock trading volume recovering. Samsung Securities rose 5.6 percent and Mirae Asset Securities soared 9.8 percent.
As the won extended gains after rising 8 percent against the dollar in April, Korean Air rose 4 percent and Asiana added 4.9 percent. Korea Electric Power Corp, sensitive to imported fuel costs, gained 5.9 percent. Retail stocks also joined the rally, after media reports of strong department store sales in April and early May. Lotte Shopping surged 8.9 percent and Hyundai Department Store rose 4.8 percent.
The world's largest shipbuilder Hyundai Heavy Industries rose 7.4 percent on the improving earnings outlook and Hanjin Heavy Industries gained 8.8 percent. As recovery hopes dominated, defensive telecom issues fell, with mobile carrier SK Telecom down 1.6 percent. Recent outperformer technology stocks also lagged. Memory chip and electronics giant Samsung Electronics fell 1.7 percent.