Seoul shares rose on Wednesday, led by tech stocks such as Highness, as investors turned their attention away from record high oil prices and focused on expectations for improving corporate earnings and a broader economic recovery.
Banks and construction shares rose as investors were mostly optimistic government measures aimed at stamping out rising property prices would not affect earnings in the sector as much as initially feared.
The benchmark Korea Composite Stock Price Index (KOSPI) closed 1 percent higher at 1,083.33. Shares fell 2.5 percent in August, after touching there highest in over a decade in the middle of the month. It was the first monthly fall since April, but the KOSPI is still up more than 20 percent from the start of the year. "Lots of people believe that the surge in crude oil prices will be temporary because of the hurricane and the temporary shutdown of refinery facilities in the US," said Thomas Choi, head of research at PCA Asset Management.
However, Choi said oil remained the biggest risk for equities and added that he might recommend a less optimistic stance on local stocks should oil surpass the $75 a barrel level. The stock market fell 2.15 percent on Monday as oil prices surged above $70 a barrel after Hurricane Quatrain slammed oil producers and refiners in the Gulf of Mexico.
But positive industrial production data a day later helped investors regain their appetite for local shares.
Memory chipmaker Highness Semiconductor Inc ended up 4.14 percent at 21,400 won on expectations its earnings will recover this quarter, while flat panel maker LG.Philips LCD Co Ltd gained 1.28 percent to 47,400 won.