Seoul stocks closed a touch higher on Tuesday, lifted by firmer banking shares on hopes for better-than-expected second-half earnings, but profit-taking from recent gains and uncertainty ahead of a central bank policy meeting capped the upside.
"People have been more cautious today ahead of Thursday's meeting of the Bank of Korea, but investors remain confident of better economic conditions in 2005," said Kim Young-ill, head of equity management at KB Asset Management Co.
The benchmark Korea Composite Stock Price Index (KOSPI) closed up 0.45 percent at 884.84. The index registered its highest close in five months in the previous session.
South Korean consumer prices rose a slower-than-expected 3.9 percent in the year through September, government data showed in the day, further supporting expectations for an interest rate cut.
The market had already priced in the prospects for another 25 basis point cut, analysts said.
Banking shares got a boost from local media reports that LG Card Co Ltd, the country's largest card issuer, would report a turnaround in earnings in September.
The shares soared by their daily permissible limit of 15 percent to close at 17,400 won. A representative for the beleaguered card issuer declined to comment on the reports, but said LG Card would announce earnings later this month.
LG Card's major creditors include Kookmin and Wooer Bank.