Seoul shares ended up 5.9 percent on Wednesday, posting their biggest daily percentage gain in seven weeks, as Samsung Electronics led tech shares higher and banks rallied after their US peers' gains overnight. Samsung Elec ended 10.52 percent higher, its biggest one-day percentage jump since late October 2008, after German rival Qimonda filed for insolvency last Friday.
The Korea Composite Stock Price Index ended up 5.91 percent at 1,157.98 points, the highest close in six weeks. "Over the long Lunar New Year holiday, we've had positive developments in overseas markets, including the Nikkei's 5 percent jump on Tuesday and firm gains in US markets, that are being reflected in Seoul shares today," said Hong Soon-pyo, a market analyst at Daishin Securities.
"Also the ongoing US Fed interest rate meeting has raised expectations for comments on how the troubled US financial sector will be handled," Hong said, adding that solid gains in US futures had also boosted sentiment. The S&P 500 futures index rose 1.95 percent and Nasdaq futures advanced 1.54 percent.
In a move highlighting the burst of activity on the market following the holidays the Korea Exchange temporarily suspended programme buying orders for five minutes from 0154 GMT due to volatile futures prices. Other techs including Hynix Semiconductor followed Samsung's lead, with Hynix jumping by its daily limit of 14.98 percent.
"Qimonda's potential exit from the market is certainly good news for domestic memory chip makers," said Kim Seung-han, a market analyst at HI Investment & Securities. "It is expected to ease oversupply worries and may help boost domestic memory chip makers' competitiveness."
However shares in Samsung Techwin fell 1.74 percent after the firm, which makes components for a range of industries, reported a 64 percent drop in 2008 net profit. The company cited falls in camera prices and new investments for the decline.
Banks advanced across the board after their US peers rose overnight. Shares were also recovering after falls last week on worries about restructuring-related losses after banks listed troubled small and medium-sized shipbuilders and construction firms to which they would continue to extend credit.
Hana Financial Group advanced 12.0 percent and Woori Finance Holdings jumped 14.29 percent. Foreign investors bought a net 148 billion won worth of shares. Institutions bought a net 489 billion won and retail investors sold a net 701 billion won.
Advancers led decliners by 679 to 163, with 52 titles ending unchanged. Trading volume stood at 340 million shares worth 4.5 trillion won, compared with 259.1 million shares worth 3.5 trillion won on Friday. The KOSPI 200 March futures index rose 9.30 points to 151.50 points and the KOSPI 200 spot index climbed 9.29 points to 151.04 points. The junior Kosdaq went up 2.51 percent to close at 361.68 points.