Shares jump 2.07 % on eurozone hopes
Korean stocks finished 2.07 percent higher Tuesday as investors' sentiment was boosted by expectations that stimulus measures from Europe and the U.S. will come, analysts said. The local currency rose sharply against the U.S. dollar.
The benchmark Korea Composite Stock Price Index (KOSPI) soared 38.2 points to close at 1,881.99 Trading volume was moderate at 353.6 million shares worth 5.55 trillion won ($4.91 billion), with gainers outstripping losers 563 to 253.
"The market started to trust that European policy makers will take actions to combat the deepening sovereign debt crisis after the recent remarks by European leaders including European Central Banck (ECB) chief Mario Draghi," said Han Beom-ho, a market analyst from Shinhan Investment Corp.
Draghi pledged over the weekend to "do whatever is necessary" to protect the euro, along with political supports from leaders of Germany, Spain and Italy.
"So it's all about the close-watched ECB policy meeting scheduled on Thursday. Investors anticipate that there will be powerful measures like purchasing Spanish bonds or issuing ECB bonds," said Han.
Han noted that other hopes for new rounds of monetary stimulus from the U.S. Federal Reserve's two-day meeting on Tuesday also drove up the main index.
"But whatever strong stimulus packages come from the ECB and Fed meetings, the rest of economic data such as slowed U.S. second-quarter growth will still weigh on the market and limit further gains," added Han.
Foreign investors scooped up a net 603 billion won worth of local shares, extending their buying streak to a third consecutive session.
Most shares gained ground across the board, driven by gains in blue chips, autos and shipbuilders.
Tech giant Samsung Electronics shot up 2.67 percent to 1,309,000 won and its smaller rival SK hynix added 1.88 percent to 21,700 won.
Cars were also among the winners, with market leader Hyundai Motor gaining 1.94 percent to 237,000 won and its smaller affiliate Kia Motors jumping 2.76 percent to 78,000 won.
The world's biggest shipyard Hyundai Heavy Industries skyrocketed 6.61 percent to 242,000 won and Daewoo Shipbuilding & Marine Engineering soared 6.61 percent to finish at 25,000 won.
The local currency ended at 1,130.6 won against the greenback, up 7 won from Monday's close, thanks to the KOSPI rise and recovering appetite for risky assets, dealers said. (Yonhap)