Seoul shares rose for a third straight session on Monday led by technology stocks after better-than-expected earnings and strong fourth-quarter guidance from memory chip maker Samsung Electronics boosted the outlook for the sector.
Gains were underpinned by positive US retail sales data and a report showing improving US consumer sentiment, both out on Friday, which eased worries about the health of the world's largest economy.
Steel maker POSCO Co Ltd rose 1.96 percent to 260,500 won after posting a smaller-than-expected drop in quarterly net profit. The results came after the market's close on Friday. "It's been a good start to earnings," said Thomas Choi, head of research at PCA Asset Management. "After seeing the good results by Samsung Electronics, investors are looking for better-than-expected earnings in the tech sector," he added.
The benchmark Korea Composite Stock Price Index (KOSPI) rose 0.60 percent to end at 1,356.72 points. The index has now cut its loss since North Korea at the beginning of October announced its intention to test a nuclear device to 1.3 percent.
However, worries that Pyongyang will conduct a second nuclear test after the October 9 explosion, or that tensions in the region will escalate, could continue preventing strong share price gains at a time when global markets are rallying.
Japan's Nikkei index scored a new five-month closing high on Monday, while on Friday the Dow Jones industrial average hit a record and European markets hit five-year highs.
Samsung Electronics shares rose as much as 2.2 percent after reporting net profit that beat estimates and after the world's biggest maker of memory chips expressed confidence about its results in the fourth quarter. Shares ended up 0.93 percent at 650,000 won.
LG Electronics Inc rose 1.19 percent to 59,600 won ahead of its quarterly results due out on Tuesday. LG.Philips LCD rose 3.47 percent to 29,800 won, recovering from an 8 percent drop last week when the flat panel maker - the first major South Korean firm to report earnings - disappointed investors with its profit guidance.
The technology sector also got a lift from Friday's data showing US retail sales, excluding gasoline sales, rose in September, and after the University of Michigan's consumer sentiment index jumped in October.
The United States is South Korea's second-biggest export market after China. Among other gainers, Hyundai Merchant Marine Co Ltd surged 14.92 percent to 18,100 won after the shipping firm said it would issue new redeemable shares in order to finance a bid for construction company, Hyundai Engineering and Construction Co Ltd.
The issuance helped ease worries about how Hyundai Marine would finance its widely expected bid. But auto maker Hyundai Motor Co fell 1.39 percent to 78,000 won as investors expect earnings growth in the third quarter to underperform technology firms due to labour strikes over the summer and a stronger won currency.
Trade volume reached 203.5 million shares worth 2.7 trillion won, data at 0625 GMT showed, compared to 305.3 million shares worth 3.1 trillion won on Friday. Gainers trumped decliners by 465 to 272 with 87 titles ending flat.
Foreign investors sold a net 30.8 billion won in shares on the main bourse, while institutional investors sold a net 2.3 billion won. However, retail investors bought a net 24.8 billion won.
The December KOSPI 200 futures index rose 0.95 point to 178.15, while the underlying KOSPI 200 spot index gained 1.09 points to 176.51. South Korea's junior and tech heavy Kosdaq market rose 1.36 percent to finish at 582.04.