South Korean shares rose for a second day on Tuesday, lifted by hopes for progress in tackling US fiscal woes, but the market pared early gains as a strengthening Korean won hit auto makers. The Korea Composite Stock Price Index (KOSPI), which hit a three-and-a-half month low on Friday, closed up 0.6 percent at 1,890.18 points.
After the KOSPI gained 1 percent early on Tuesday, it "lost some steam because of profit-taking as investors digested the news of France's credit downgrade," said Park Hae-sung at LIG Securities, referring to Moody's ratings cut. Wall Street climbed nearly 2 percent on Monday on expectations that Congress will reach a compromise to avoid a combination of spending cuts and tax hikes that threatens to derail the US economy.
Tech exporters rallied ahead of US holiday shopping season that kicks off this Friday, with Apple supplier LG Display rising 4 percent and Samsung Electronics up 2.4 percent. Key automakers lost for a second day, with Kia Motors shedding 2.3 percent and affiliate Hyundai Motor down 0.7 percent. Market watchers said Hyundai and Kia were struggling as investors eye the won-yen exchange rate with concern. The Korean won has been strengthening steadily against the Japanese yen, making the price of South Korean exports rise over those of Japanese rivals. The KOSPI 200 benchmark of core stocks closed up 0.8 percent, while the junior KOSDAQ was 0.7 percent higher.