Seoul shares rose on Tuesday, with auto battery related issues such as Samsung SDI rallying on an improved outlook for the sector, while SK Energy hit a three-month high. The Korea Composite Stock Price Index (KOSPI) finished up 0.69 percent at 1,619.69 points.
"A positive finish in European markets overnight, and the fact that US markets were closed for a holiday helped keep markets fairly stable as there is not a strong lead," said Kim Seung-han, a market analyst at HI Investment Securities. "Upcoming futures and options expiry is also keeping investors fairly cautious," Kim said, adding that markets will have a hard time making substantial gains until global job and consumption data show signs of compelling improvements.
Auto battery issues rose across the board amid strengthening expectations towards the sector, with Samsung SDI, a display and battery maker, gaining 5.08 percent. LG Chemical rose 1.94 percent. "Like the light emitting diode (LED) theme, green energy issues have been drawing great attention lately," said Moon Hyun-shik, an analyst at Meritz Securities, adding however that such expectations are yet to be reflected in company earnings.
Meanwhile SK Energy, South Korea's top crude refiner, rallied on optimism about its third quarter earnings and amid market talk it may enter the auto battery business. An SK Energy spokesman said the company had developed and was currently testing for mass production lithium batteries for hybrid cars, but had not made a decision on when it would officially enter the sector.
"The market talk is that SK Energy's third quarter earnings will be vastly better than its second quarter numbers. Expectations that the company will enter the auto battery business are stoking appetite for the shares," said Kim Jae-joong, an analyst at Woori Investment & Securities. Kim added that there were rumours SK Energy may secure an auto battery supply deal with a foreign automaker.
Shares in SK Energy finished up 14.56 percent at 118,000 won, their highest level in nearly three months. Shares in Korea Zinc, the world's No 2 zinc refiner, also jumped 12.11 percent amid gains in zinc prices. Analysts said that amid growing hopes for an economic turnaround, expectations that zinc prices will post steady gains were stoking appetite for the shares.
Shares in Samsung Techwin went up 6.12 percent on expectations of solid earnings for the third quarter. Analysts said the maker of security cameras, semiconductor materials and aircraft engines has seen rising orders during the quarter. "Investors who were interested in the electronics industry seem to be turning their attention to Samsung Techwin, not just because its shares had relatively underperformed, but more because it has seen rising orders in turbine engines and cameras so far in this quarter," said Alex Oh, an analyst at Hanwha Securities.