Seoul Stocks End Higher on Tech Gains
South Korean stocks closed higher Thursday as investors snapped up tech shares, shrugging off concerns about the impact of a rate increase by the central bank, analysts said. The South Korean won rose against the U.S. dollar.
The benchmark Korea Composite Stock Price Index (KOSPI) rose 5.27 points, or 0.28 percent, to 1,908.68. Volume was moderate at 408.4 million shares worth 6.74 trillion won ($7.3 billion), but losers outnumbered winners 404 to 366.
"The rate hike seemed to surprise the market as the key index trimmed earlier gains and even slid into negative territory at one point," said Kang Moon-sung, an analyst at Korea Investment & Securities. "But as the rate increase is seen as the central bank's confidence in South Korea's economic growth, its negative
impact on the market will be limited."
Earlier in the day, the Bank of Korea unexpectedly raised its call rate target for August by 0.25 percentage point to 5 percent in an apparent move to rein in excessive liquidity.
Tech blue chips gained momentum on foreign and institutional buying. Tech bellwether Samsung Electronics advanced 3.16 percent to 621,000 won and chip giant Hynix Semiconductor rose 2.79 percent to 38,700 won. Flat-panel giant LG Philips LCD gained 4.7 percent to 45,650 won.
But financial shares traded in negative territory due to the rate hike. Top lender Kookmin Bank fell 0.92 percent to 75,100 won.
Shares of Hyundai Group affiliates involved in inter-Korean economic cooperation lost ground. No. 2 shipping line Hyundai Merchant Marine shed 4.67 percent to 49,000 won on profit-taking.
U.S. stocks closed higher Wednesday on tech gains. The Dow Jones industrial average rose 1.14 percent and the Nasdaq composite index gained 2.01 percent.
The local currency finished at 922.9 won to the U.S. dollar, up 1.3 won from Wednesday's close, as offshore investors unloaded the greenback, dealers said.