South Korean shares finished 0.67 percent higher Friday as institutional investors including the National Pension Fund snapped up shares despite persisting eurozone worries, analysts said. The local currency edged down against the U.S. dollar.
Reversing earlier losses, the benchmark Korea Composite Stock Price Index rose 12.3 points to 1,835.4, extending its winning streak to a seventh session. Trading volume was moderate at 344 million shares worth 4.99 trillion won ($4.31 billion) with losers leading gainers 435 to 399.
“There were no upbeat overseas issues, but demand for Korean shares from local institutions was strong,” said Kwak Joong-bo, an analyst at Samsung Securities Co. “Investors are pinning high hopes on the measures to stabilize Europe’s financial markets but it will take a while to coordinate many different views and voices in the market.”
The KOSPI got off to a weak start and traded in a limited range in early morning after Wall Street closed mixed and Standard & Poor’s downgraded its long-term debt rating on Spain on its sovereign debts and growth concerns.
But pension funds including the National Pension Fund, the world’s fourth largest, increased its holdings of Seoul shares for three straight sessions, lending support to the market.
Investor response to the rating cut on Spain was muted as the move was widely expected, according to the Samsung analyst.
Telecom companies fueled the KOSPI’s advance. LG Uplus, South Korea’s smallest mobile operator, spiked 6 percent to 6,540 won, and SK Telecom, the leading mobile carrier, advanced 2.93 percent to 158,000 won.
Banks and financial companies also gained ground. KB Financial Group, which has top lender Kookmin Bank under its wing, gained
1.39 percent to 43,650 won.
Despite Google’s upbeat earnings report, tech shares closed mixed. Market bellwether Samsung Electronics fell 0.45 percent to 886,000 won but LG Display Co. added 0.45 percent to 22,200 won.
LG Electronics closed flat at 73,000 won after Moody’s Investors Service downgraded its outlook to negative from stable.
The local currency closed at 1,156 won to the greenback, down 0.1 won from Thursday’s close, as the rating downgrade on Spain stoked appetite for safe assets, dealers said.