Seoul shares rose to a record high on Friday on optimism that exporters' profits would recover in the second half, with Samsung Electronics also gaining after its plan to buyback stock offset lacklustre quarterly results.
Anticipation of a share buyback lifted POSCO Co Ltd to its second record high in two days, as the world's fifth-biggest steel maker by output seeks to defend itself from possible hostile take-overs at a time of consolidation in the global steel sector. The benchmark Korea Composite Stock Price Index (KOSPI) rose 1.92 percent to a record close of 1,432.72 points, just off an all-time intraday high of 1,434.68 which came late in the session.
The combined market capitalisation of the main index and the junior tech-heavy Kosdaq index reached a record 773 trillion won ($804.3 billion), Korea Exchange data showed, almost equivalent to the country's gross domestic product last year, which was 806.6 trillion won.
Shares in the KOSPI rose 2.16 percent for the week, making it the index's third consecutive weekly gain, and bringing it up 3.9 percent so far in 2006. It marks a reversal from the first quarter, when it was the only index in the region to post a loss.
"Investors are seeing expectations for weak first-half earnings as fully priced in. The won may have hit bottom, so earnings at exporters could improve," said Kim Jeong-hwan, a strategist at Woori Investment and Securities.
Earnings in the second half could also be helped as an improving global economy bolsters demand, analysts have said.
Samsung Electronics Co Ltd rose 2.66 percent to 655,000 won, its biggest one-day percentage gain since advancing 2.78 percent on January 31, as investors bet on a recovery in its chip and display divisions by the second half.
POSCO rose 3.27 percent to 268,500 won, off an all-time high of 273,500 won hit earlier in the session, after Chief Executive Lee Ku-taek said on Thursday the best way to fend off potential hostile bids was through a 20 percent increase in its share price.
The Kosdaq market gained 1.03 percent to finish at 704.57, its highest close since ending at 705.57 on January 19. Trade volume reached some 337.3 million shares worth 4.4 trillion won, data at 0625 GMT showed, compared to 306.7 million shares worth 3.9 trillion won on Thursday. Gainers trumped decliners 549 by 212 with 70 titles ending flat. Foreign investors bought a net 67.6 billion won in shares on the main bourse, while institutional investors bought a net 705.57 billion won. However, retail investors sold a net 375.7 billion won.
The June KOSPI 200 futures index rose 3.65 points to 186.65, while the underlying KOSPI 200 spot index rose 3.76 point to 185.67.