Seoul shares rose on late Friday bargain-hunting, recovering from an earlier drop as auto shares led by Hyundai Motor plunged due to cost concerns over wage litigation. The Korea Composite Stock Price Index (KOSPI) closed up 0.4 percent at 1,906.75 points, rebounding from a near five-month low closing on Thursday.
"Today's gains were not from any improvement in investor sentiment, but from bargain-hunting after (Thursday's) declines," said Lee Da-seul, an analyst at Korea Investment & Securities. He said investors have recently tended to snap up bargains when the benchmark nears the 1,900-mark, or roughly where KOSPI shares' total price equals their 12-month forward book value.
However, next week's earnings results from major companies as well as local and overseas economic data could buck the trend, Lee added. Auto shares fell, with Hyundai Motor closing down 2.7 percent after a local media report said the automaker could face billions of dollars in extra wage costs as a result of labour litigation. Hyundai Motor affiliates Kia Motors also fell 1.2 percent while Hyundai Mobis dropped 1.3 percent. However, other large-caps were mostly up, with tech shares gaining ground after Thursday's 2.3 percent fall sparked partly by a weak earnings forecast from a key Apple Inc supplier.
Chipmaker SK Hynix gained 3.2 percent and Samsung SDI rose 0.8 percent, although heavyweight Samsung Electronics closed down 0.5 percent. Local retail and institutional investors purchased a net 240.2 billion won ($214 million) worth of KOSPI shares at closing, supporting the index. Declining shares outnumbered gainers 425 to 380. The KOSPI 200 benchmark of core stocks closed up 0.4 percent, while the junior KOSDAQ fell 1.8 percent.