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Stocks up on stimulus

KOSPI surpasses 2,060 for first time since Oct. 23

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Published : 2014-07-29 21:04
Updated : 2014-07-29 21:29

Korean stocks closed higher Tuesday to pass the 2,060 mark for the first time in three years on improved economic data from China, with Seoul’s latest stimulus package also lending support, analysts said. The South Korean won gained against the U.S. dollar.

The benchmark Korea Composite Stock Price Index gained 13.16 points, or 0.64 percent, to 2,061.97. Trading volume was high at 400.3 million shares worth 5.88 trillion won ($5.73 billion), with losers outpacing gainers 536 to 277.
Trading numbers are displayed at the Korea Exchange Bank headquarters in Seoul on Tuesday. Stocks hit a new high, rising 13.16 points, or 0.64 percent, to 2,061.97. (Yonhap)

Tuesday’s session marked the first time in three years for the KOSPI to close above the 2,060-mark since it reached 2,066.26 on Aug. 3, 2011.

It was also the first time the index rose above 2,060 during trading since Oct. 23 last year, which saw an intraday high of 2,063.28. The index reached 2,065.96 at its highest point on Tuesday.

“While the KOSPI had remained sluggish over previous periods, the latest gain followed the launch of a new governmental economic team, as well as gains on the Chinese stock market,” said Kang Song-chul, an analyst from Korea Investment & Securities Co.

“The Chinese market has a great impact on local shares,” Kang added. “China is South Korea’s top trading partner, accounting for 22 percent of Seoul’s exports and 16 percent of imports.”

Analysts said local investors also scooped up shares on the improved outlook for the country’s economy, as the government allocated 41 trillion won for an economic stimulus plan to bolster domestic consumption.

Foreigners bought a net 355.4 billion won, while retail investors offloaded a net 461.2 billion won. Institutions scooped up a net 134.1 billion won.

KT, South Korea’s No. 2 mobile carrier, added 1.79 percent to 31,300 won, despite its poor second-quarter earnings. The company announced earlier in the day that it swung to a net loss in the second quarter from a year earlier, apparently due to falling returns from its traditional fixed-line business.

Tech shares traded higher, with market behemoth Samsung Electronics rising 2.06 percent to 1,386,000 won and Samsung Electro-Mechanics adding 2.98 percent to 62,200 won. LG Display rose 0.63 percent to 32,100 won and Samsung SDI moved up 0.64 percent to 158,000 won.

Carmakers also traded bullish, with Hyundai Motor adding 4.63 percent to 237,500 won and auto parts maker Hyundai Mobis increasing 5.16 percent to 295,500 won. Kia Motors gained 5.95 percent to 60,500 won.

Builders traded mixed, with Hyundai Engineering & Construction adding 1.09 percent to 65,100 won, while Daewoo Engineering & Construction shed 2.35 percent to 9,960 won. GS Engineering & Construction edged down 0.5 percent to 39,800 won.

The local currency ended at 1,024.40 won against the greenback, up 1.90 won from Monday’s close.

Bond prices, which move inversely to yields, closed lower. The yield on three-year Treasuries moved up 1.3 basis point to 2.518 percent, and the return on the benchmark five-year government bonds added 1.7 basis point to 2.745 percent. (Yonhap)

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