The Korea Herald

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Seoul shares hit new high on earnings, bin Laden's death

By 황장진

Published : May 2, 2011 - 16:21

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Korean stocks finished at a fresh high on Monday as investor sentiment was boosted by strong U.S. earnings reports and news of Osama bin Laden's death, analysts said. The local currency climbed against the U.S. dollar.

The benchmark Korea Composite Stock Price Index (KOSPI) rose

1.67 percent to 2,228.96. Trading volume was thin at 298 million shares worth 8.32 trillion won ($7.8 billion) with gainers trumping losers 572 to 241.

"Investor sentiment was encouraged as the U.S. markets finished last week higher on earnings, and the announcement of bin Laden's death helped ease risks in the Middle East," said Bae Sung-young, an analyst at Hyundai Securities Co.

"Sectors that have been excluded from market rallies lately, such as tech and builders, led the overall gain," said Cho Byung-hyun, an analyst at Tongyang Securities Inc. "But trading volume has been reduced from the last week so it is hard to say that it was a bull market."

Helped by net buying from foreign and institutional investors, the KOSPI refreshed the record closing high after hitting a new high one week ago.

Builders were bullish as investors betted that the government's latest tax incentives will stimulate the slumping real estate market. Doosan Engineering & Construction spiked 8.4 percent to 5,550 won and Samsung C&T surged 5.16 percent to 81,500 won.

U.S. President's announcement that al-Qaeda leader bin Laden was killed in a covert U.S. military operation pushed down crude oil prices, propping up shares of airline companies. Leading air carrier Korean Air Lines jumped 6.56 percent to 69,800 won and its smaller rival Asiana Airlines skyrocketed 11.46 percent to 10,600 won.

Blue-chip tech companies also gained ground on expectations that their earnings bottomed out in the previous quarter. Market bellwether Samsung Electronics added 4.37 percent to 932,000 won.

The local currency closed at 1,065 won to the greenback, up 6.5 won from Friday's close, as bin Laden's death prompted investors to shun safety, dealers said.

Bond prices, which move inversely to yields, closed unchanged.

The yield on three-year Treasuries stayed flat at 3.77 percent and the return on the benchmark five-year government bonds also remained unmoved at 4.1 percent. (Yonhap News)