South Korean Stocks, Currency Surge

South Korea's financial markets regained stability Monday morning amid heightened hopes for global efforts to tackle the financial crisis.

The benchmark Korea Composite Stock Price Index (KOSPI) rose 47.06 points or 3.79 percent to 1,288.53. Volume was moderate at 375.61 million shares worth 5.43 trillion won ($4.38 billion), with winners outpacing losers 682 to 170.

Steep gains prompted the Korea Exchange (KRX), the bourse operator, to activate the so-called "sidecar" to suspend trading temporarily to cool the market right after its opening, according to Yonhap News.

The South Korean won also jumped against the U.S. dollar as investors dumped the greenback on expectations that the government might step up intervention to support its currency and global efforts to tackle financial turmoil might help increase liquidity in the local market.

The won closed at 1,238 won to the greenback, up 71 won from Friday's close after soaring to as high as 1,226 won at one point. The won jumped 157 won against the greenback for the past three trading sessions.

In the stock market, most blue chips posted sharp gains, with top steel maker POSCO surging 5.17 percent to 376,500 won and smaller Hyundai Steel jumping 9.74 percent to 44,500 won.

Shipbuilding and machinery shares were also among the marked gainers. No. 1 shipbuilder Hyundai Heavy Industries advanced 2.03 percent to 201,000 won and its rival Samsung Heavy Industries rose 7.49 percent to 22,250 won.

Financials ended sharply higher as investors bet on hopes for ongoing global efforts against financial crisis will help stabilize markets. Woori Finance Holdings soared 14.08 percent to 11,750 won and leading brokerage Mirae Asset & Securities also added 5.48 percent to 92,400 won.

Carmakers and tech exporters, however, lost ground. Hyundai Motor, the nation's top carmaker, inched down 0.29 percent to 68,400 won, while No. 2 tech giant LG Electronics lost 2.79 percent to 104,500 won.

A recent global credit crunch that began in the United States has created a dollar shortage for local banks and importers in South Korea, further fanning demand for the greenback. The won has lost more than 30 percent since the start of this year.

On Saturday, Strategy and Finance Minister Kang Man-soo urged advanced nations to expand their currency swap programs to emerging markets including South Korea, aimed at providing more liquidity to the local market.