Seoul shares halt four-day slide

Seoul shares rebounded to climb back above 1,800 points on Tuesday, halting a four-day slide, as investors looked to the Group of Seven industrialised nations to take decisive action in tackling Europe's resurgent debt crisis. The Korea Composite Stock Price Index (KOSPI) ended 1.05 percent higher at 1,801.85 points, recovering from a two-and-a-half week closing low logged in the previous session where shares also fell to their lowest intraday level in 2012.
"Although Greece remains the overarching issue in the market, investors felt (Monday's) falls were exaggerated given there is still much to look forward to this week policy-wise, looking at the events that are lined up," said Ham Sung-sik, an analyst at Daishin Securities. Finance chiefs of the Group of Seven leading industrialised powers will hold an emergency conference call to discuss the debt crisis in Europe on Tuesday, a sign of heightened global alarm about strains in the single currency bloc.
Battered cyclical stocks, most notably resource counters, outperformed peers on bargain hunting. Korea Zinc rallied 5.9 percent while Young Poong climbed 4.9 percent. With crude oil prices still hovering closely above a 16-month low despite a two day rebound, airliners soared on lower jet fuel expenses. Korean Air, South Korea's flagship passenger and cargo carrier, rose 4.5 percent while its rival Asiana Airlines gained 5.4 percent.
The KOSPI 200 benchmark of core stocks was up 1.1 percent, with 158 out of its 200 listed components trading higher to underscore broad gains in the market. The star performer among bluechip heavyweights was LG Electronics, rallying 4.7 percent to snap a five-day losing streak as analysts cited its expanding foothold in the smartphone market and rosy second quarter profit outlook.
Despite the gains, the prevailing atmosphere in the market was one of caution ahead of key policy events, with trading choppy and offshore players seen continuing to reduce their exposure to local shares. Foreign investors dumped a net 341.8 billion won ($289.2 million) worth of stocks for a fourth-straight selling session and the heaviest one-day sell-off in two-and-a-half weeks, although offset by institutional buyers who picked up a net 391.8 billion won worth to underpin the market. Daily turnover was seen at 3.48 trillion won, the thinnest single-day volume in more than five months. South Korean financial markets will be closed on Wednesday in observance of Memorial Day.