Seoul shares ended 2.8 percent higher on Friday, fuelled by gains in large-cap stocks including Samsung Electronics, but the index still posted its biggest weekly percentage loss in seven weeks, hit by Italian debt woes. "The market is bouncing after its sharp falls in the previous session, and is steadily firming its support around its 20-day moving average," said Bae Sung-young, a market analyst at Hyundai Securities.
The Korea Composite Stock Price Index (KOSPI) finished up 2.77 percent or 50.20 points at 1,863.45 points, but still fell 3.37 percent on the week, the biggest loss in seven weeks. Foreigners continued to offload stocks, selling a net 263.4 billion Korean won ($232.2 million), after selling the biggest amount of shares in seven weeks on Thursday.
But institutions were buyers of a net 280.4 billion won. Market volatility could increase next year as investors follow news from Europe, according to Cho Young-hyun, an analyst at Hana Daetwoo Securities. Italy, the latest eurozone nation to find itself in the bond market's cross hairs, moved closer to a national unity government on Thursday, while its treasury managed to sell 1-year bills at yields of less than 7 percent - the threshold that investors believe renders its debt burden unsustainable.
The Bank of Korea held interest rates steady for the fifth successive month on Friday as expected, and triggered little stock market reaction. Most large-cap stocks fuelled the market's upward momentum, with Samsung Electronics gaining 5.1 percent and Hyundai Motor rising 3.2 percent.
Shares in SK Telecom gained ground and finished up 3.1 percent after sharp falls on Thursday, and after the company submitted a final bid for Hynix, the world's second-biggest computer memory chip maker. Hynix Semiconductor edged up 0.2 percent. Shares in South Korean tyre maker Nexen Tire surged 11.1 percent after the company said it had considered a co-operation arrangement with its French peer Michelin. The KOSPI 200 index ended up 2.95 percent at 242.99, while the junior Kosdaq market rose 2.31 percent to 500.08.
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