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Shares soar 3.72 percent on acts by central banks

By Korea Herald

Published : Dec. 1, 2011 - 16:25

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(Yonhap News) (Yonhap News)
South Korean shares closed up 3.72 percent on Thursday, encouraged by developments in the eurozone crisis, including the cut in borrowing costs by major central banks, and overnight rallies on Wall Street.

Seoul’s main index, the KOSPI, closed up 68.67 points to 1,916.18. The tech-packed KOSDAQ ended up 3.52 points, or 0.71 percent, to 496.33.

The rally of the local bourse, as with other Asian markets, reflected the optimism induced by the lowering of borrowing costs Wednesday by the central banks of several countries including those in the eurozone, the U.S., Britain and Japan. On Thursday morning, investors also hailed China’s monetary easing and strong U.S. jobs data.

Samsung Electronics, Asia’s biggest technology company and the top component of the KOSPI, set an all-time intraday high of 1,080,000 won before closing at 1,074,000 won, up 6.97 percent from Wednesday.

Other blue-chip shares went up across the board. Hyundai Motors rose 3.99 percent, POSCO rallied 5.91 percent and LG Chem jumped 7.44 percent.

The KOSPI jumped 4.27 percent during the session, forcing the bourse operators to halt program trading for 5 minutes.

NHN, which runs the country’s top portal site, Naver.com, bucked the trend, as its shares tumbled 8.4 percent on the news that it might be designated as a “dominant market player” by Korean regulators, a label that is likely to dent its growth due to stronger regulatory control.

The rally that helped the KOSPI rise above 1,900 was largely expected as key indexes abroad rose overnight. The Dow Jones industrial average soared 490 points, or 4.2 percent, marking its biggest gain since March 2009. The Standard & Poor’s 500 closed up 4.3 percent and the Nasdaq composite index ended up 4.2 percent.

Retail investors on the Seoul bourse unloaded shares worth 1.68 trillion won to take profits, but both foreign and institutional investors placed massive buy orders in a way that sent the indexes higher.

Brokerages and oil refiners stood out among winners. Woori Investment & Securities skyrocketed by the daily limit of 14.07 percent to 11,350 won and Daewoo Securities jumped 13.35 percent to 10,700 won. SK Innovation, the leading oil refiner, climbed 8.33 percent to 175,500 won and S-Oil rose 9.91 percent to 116,500 won.

The trading volume reached 495 million shares changing hands valued at 9.25 trillion won ($8.2 billion), with gainers outpacing losers 632 to 213.

The Korean won closed at 1,126.1 won, strengthening by 16.9 won from Wednesday’s close.

By Yang Sung-jin (insight@heraldcorp.com)