Seoul shares extend gains

Seoul shares extended gains to rise 1.45 percent on Wednesday on Moody's upgrade of South Korea's sovereign ratings, with blue chip banks and techs including Samsung Electronics leading rises. "The Moody's upgrade came as a positive development and will further fuel foreign investors' buying appetite for South Korean stocks," said Kim Seong-bong, a market analyst at Samsung Securities.
"But it was not entirely unexpected so the stock market impact of the upgrade will be brief," Kim added. Moody's Investors Service on Wednesday upgraded South Korea's sovereign rating to A1 from A2, citing the country's resilience to the global financial crisis.
The Korea Composite Stock Price Index (KOSPI) ended up 24.74 points at 1,735.33. Foreign investors were buyers of a net 148.7 billion won ($132.3 million) worth of stocks. Banks rallied with KB Financial Group advancing 4.5 percent and Woori Finance Holdings climbing 3.79 percent.
"First quarter results are seen coming out not as badly as the market had estimated, as net interest margins improved and write-offs were scanty in the first quarter," said Ku Yong-uk, an analyst at Daewoo Securities. "Expectations of consolidation in the sector are also attracting interest towards banking issues," Ku added. Intel Corp's positive sales and margins forecasts, following strong earnings, boosted appetite for Seoul technology shares.
Shares in Samsung Electronics, the world's No 1 memory chip maker, rose 2.05 percent and Hynix Semiconductor, the world's No 2, advanced 0.72 percent. Shares in LG Electronics advanced 3.78 percent amid strengthening quarterly earnings expectations and on an improving smartphone business outlook.
"Positive expectations are building ahead of LG's quarterly results later this month. And its smartphone business is expected to pick up as Android phones are more widely used," said Alex Oh, an analyst at Hanwha Securities. Shipbuilders advanced helped by gains in Baltic Dry Index, which tracks the cost of shipping key commodities.
Shares in Hyundai Heavy Industries rose 3.16 percent and STX Offshore & Shipbuilding advanced 3.61 percent. Institutions were buyers of a net 95.7 billion won worth of stocks and retail investors were sellers of a net 179.8 billion won worth. Advancers outnumbered decliners 524 to 276, with 88 issues ending flat.
Trading volume stood at 424.7 million shares worth 5.7 trillion won, compared with 360 million shares worth 4.3 trillion won in the previous session. The KOSPI 200 June futures index ended up 2.90 points at 228.55, and the KOSPI 200 spot index rose 3.39 points to 228.08. The junior Kosdaq market ended 0.62 percent higher to close at 509.69.