Seoul shares post highest gain

Seoul shares posted a near-15-month closing high on Wednesday as economic recovery hopes strengthened, with exporters and banks including Samsung Elec and Shinhan Financial fuelling gains. The Korea Composite Stock Price Index (KOSPI) finished up 1.81 percent at 1,683.33 points, the highest close since late June, 2008.
"Positive US retail data has strengthened hopes for economic recovery, and prompted foreign buying of Seoul stocks," said Kim Seong-bong, a market analyst at Samsung Securities, adding that gains in regional markets further boosted appetite for shares.
Analysts also foreign buying was further helped by the upcoming upgrade of South Korea's status by the FTSE. The FTSE is scheduled to upgrade South Korea to developed market status from September 21, according the Korea Exchange, after the global index compiler decided on the upgrade a year ago.
Foreign investors were buyers of a net 888.8 billion won ($733.1 million) worth of stocks, posting their ninth buying session and biggest daily purchase since October, 2007. Key exporters rose on strengthening economic hopes, with Samsung Electronics, the world's No 1 memory chip maker, finishing up 3.38 percent, and Hyundai Motor gaining 3.69 percent.
Brokerages outperformed amid the market rally on expectations commissions and demand for financial products would rise. Shares in Samsung Securities, South Korea's top brokerage by market value, rose 2.24 percent and Woori Investment & Securities advanced 3.01 percent.
Banking issues also gained, with KB Financial Group rising 3.39 percent and Shinhan Financial Group gaining 1.87 percent. However defensive issues underperformed as preference for safer havens weakened, sending beverage maker Lotte Chilsung down 0.64 percent, and mobile operator LG Telecom down 0.98 percent. A stronger won, which hit an 11-month high on Wednesday, boosted airlines and tour issues on hopes a more robust domestic currency may encourage overseas travel.
Shares in Korean Air Line, South Korea's top air carrier, were up 5.08 percent and Hana Tour gained 2.5 percent. The improving economic outlook and gains in the won also lifted commodities issues, sending POSCO, the world's No 6 steelmaker, up 3.41 percent, and Hyundai Steel up 4.13 percent.