Seoul shares rose on Thursday helped by robust programme buying on the day options expiry fell, with gains in Hynix on a bullish outlook and banks on positive brokerage notes lending support. Markets earlier came under selling pressure as investors grew wary before the South Korean central bank's rate decision and comments on Friday.
But were ultimately lifted by programme buying, said Samsung Securities analyst Chung Myoung-gi. "Investors are also cautiously eyeing any comments from the Bank of Korea tomorrow for indications on its monetary stance, especially following Australia's rate hike," said Kwak Joong-bo, a market analyst at Hana Daetoo Securities.
"Third quarter earnings are expected to help sentiment, but concerns about whether companies will keep up growth rates in the fourth quarter, and how the stronger won will impact their earnings, is a concern," Kwak added. The Korea Composite Stock Price Index (KOSPI) finished up 1.09 percent at 1,615.46 points.
Banking issues including KB Financial Group advanced helped by positive brokerage notes. Macquarie said in a note dated October 8 that it expected South Korean banks to post third quarter earnings stronger than the market consensus. "We reiterate our bullish stance on Korean banks on the back of strong revenue growth driven by strong pickups in net interest margins, improvements in asset quality and expected sector consolidation in 2010," Macquarie said.
KB Financial Group rose 1.34 percent and Shinhan Financial Group ended up 1.98 percent. Hynix Semiconductor, the world's No 2 memory chip maker, rose 4.89 percent helped by a Daiwa Securities note dated October 7. Daiwa maintained its positive rating on South Korean memory chip companies, saying it expected Samsung Electronics and Hynix to post robust DRAM operating profit margins of a high-teen percentage for the third quarter and margins to improve further in the fourth quarter.
Shares in Tong Yang Life ended at 14,150 won, substantially below its IPO pricing of 17,000 won. "Tong Yang Life, the country's No 7 life insurer, is now nearly as expensive as Hyundai Marine & Fire, the number No 2 non-life insurer," Sung added. Pharmaceutical firm Green Cross jumped 9.92 percent on hopes that it will post improved earnings from the third quarter thanks to flu vaccine development.
Institutions sold a net 157.6 billion won worth of shares and retail investors bought a net 167.3 billion won. Foreign investors sold a net 17.7 billion won worth of stocks. Advancers led decliners 499 to 301, with 72 counters ending flat. A total of 369.3 million shares worth 6.5 trillion won changed hands, compared with 401.5 million shares worth 6.6 trillion won traded on Wednesday. The KOSPI 200 December futures index rose 3.40 points to 212.50, while the KOSPI 200 spot index ended up 2.07 points at 211.01. The junior Kosdaq market ended up 1.14 percent at 496.96 points.