Seoul shares ended firmer on Wednesday, helped by gains in some technology issues on the back of strengthening earnings outlooks, but banks fell after ratings agency downgrades. The Korea Composite Stock Price Index (KOSPI) ended up 0.52 percent to 1,435.70 points, the highest close since October, 1, 2008.
"Shares continue to have upward momentum and the fact that the index has again hit a new closing high for the year comes as a positive sign. Our view is that the main index will hit 1,510 points by July," said Kwak Joong-bo, a market analyst at Hana Daetoo Securities.
But analysts also said eyes were on recent strength in the won. "We have in recent weeks been seeing fast rises in the won, and although it is not likely that the won will strengthen significantly from here, it is still something that investors will be closely following," said Kang Sung-won, a market analyst at Dongbu Securities.
The local currency edged slightly lower on Wednesday. Gains were led by technology issues, with shares in Samsung Digital Imaging, a camera-making affiliate of Samsung Electronics, spiking on growing hopes for solid second quarter earnings, analysts said.
"After being spun off from Samsung Techwin, Samsung Digital Imaging is enjoying lower overhead costs, and camera sales this quarter are coming out stronger than expected," said Chun Seong-hoon, an analyst at Hyundai Securities. Samsung Digital Imaging shot up by its daily limit of 15 percent.
LG Display, the world's No 2 maker of liquid crystal displays, ended up 1.01 percent. But banking issues underperformed after Moody's cut ratings of South Korea's four largest banks including Kookmin Bank, a unit of KB Financial Group, and Hana Bank, a unit of Hana Financial Group.
"Momentum in asset quality deterioration has accelerated with the system non-performing loans ratios rising," Moody's said. Shares in KB Financial Group finished down 1.67 percent and Hana Financial Group edged up 0.18 percent. Elsewhere, shares in Dongkuk Steel, South Korea's third-largest steelmaker, rose 1.16 percent after it cut prices of steel used for ship plates by 11 percent, its third reduction this year, to match a move by a bigger rival POSCO.
Institutions sold a net 289.4 billion won worth of shares and retail investors offloaded a net 238 billion won. Foreign investors bought a net 523.8 billion won. Advancers led decliners 419 to 380, with 91 unchanged. Trading volume stood at 690 million shares worth 6.6 trillion won compared with 760 million shares worth 7.5 trillion won on Tuesday. The KOSPI 200 June futures index ended 1.00 points higher at 183.75, and the KOSPI 200 spot index gained 1.04 points to 183.80. The junior Kosdaq market rose 1.59 percent to end at 562.57 points.
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