Seoul shares finished higher on Thursday led by Hynix Semiconductor and banking issues, with unexpectedly strong US economic data and gains in the won also lending support. The Korea Composite Stock Price Index finished up 1.20 percent at 1,243.80 points, gaining for a fifth consecutive session and up 7 percent on the week. The close was the highest in more than five months.
"Surprisingly positive economic data from the United States signalled that while the economy is definitely not in good shape, the rate at which it is deteriorating has slowed down. It stoked hopes that the first quarter may be the bottom," said Kim Seung-han, a market analyst at HI Investment & Securities. New orders for long-lasting US-made goods rose in February for the first time in seven months and new home sales rebounded, US government data showed on Wednesday.
"However in order for the index to rise meaningfully above the 1,230 point level, we need surer signs that the much-awaited economic turnaround is around the corner," Kim added. Foreign investors were net buyers for an eighth consecutive session, picking up a net 54.3 billion won.
"Foreign investors are slowly getting into the market as risk appetite emerges on easing bank worries, and on the view that emerging economies probably will not land as hard as feared," said Oh Hyeon-suk, a senior market analyst at Samsung Securities. "The index could go up to as high as 1,400 points by the end of first half - not on fundamental improvements, but on the expectations surrounding governments efforts to ease the liquidity situation," Oh added.
Gains were led by Hynix Semiconductor Inc, which rallied nearly 15 percent, helped by a recovery in memory chip prices and positive comments by Citigroup on its financial health. Citigroup called concerns about Hynix Semiconductors financial risks "overblown" in a report on Thursday, but cut its earnings estimates on the firm. "Under the worst-case scenario of no operational improvements in 2009, additional cash requirements will be minimal, in our view," Citigroup said.
Spot prices of key dynamic random access memory (DRAM) chips rose more than 13 percent by midday on Thursday, according to DRAMeXchange. Samsung Electronics, the worlds No 1 memory chip maker, rose 2.52 percent. Banking issues also fuelled the markets gain, helped by the stronger won currency and improving sentiment towards financials amid lessening fears about the sector.
KB Financial Group, the holding firm of Kookmin Bank, the countrys largest commercial lender, advanced 4.26 percent and Shinhan Financial Group rose 2.59 percent. But defensive issues lagged as risk appetite grew, with tobacco monopoly KT&G dipping 0.4 percent and Hite Brewery, the countrys largest beer maker, losing 0.35 percent. Local institutions bought a net 60.7 billion won worth of shares on the main board, and retail investors sold a net 83 billion won worth.
Advancers led decliners by 558 to 261, with 68 titles ending unchanged. A total of 580 million shares worth 5.8 trillion won changed hands, compared with 488.5 million shares worth 5 trillion won traded on Wednesday. The KOSPI 200 June futures index rose 1.95 points to 162.85 points and the KOSPI 200 spot index was up 1.94 points at 162.22. The junior Kosdaq market rose 1.9 percent to end at 427.27 points.