Shares rise 1.05% on big-cap gains

Korean stocks rose 1.05 percent Tuesday on big-cap gains and predictions that a deal may be reached on Europe's fiscal woes, analysts said. The local currency rose against the U.S. dollar.

The benchmark Korea Composite Stock Price Index (KOSPI) rose 18.72 points, to 1,801.85, ending a four-day losing streak. Trading volume was light at 318 million shares worth 3.46 trillion won ($2.92 billion), with gainers clearly outpacing losers 629 to 212.

"The rebound was helped by investors buying shares that fell excessively in the previous trading session," Lee Jae-hoon, a market analyst at Mirae Asset Securities said. The local bourse plunged 2.8 percent Monday with stocks of most companies losing ground.

He said that forecasts that headway may be made at the upcoming European Central Bank's meeting scheduled for Thursday buoyed market sentiment along with prospects that the U.S. may introduce new stimulus programs to fuel its economy.

Others such as Kim Byung-yun, an analyst at Woori Investment & Securities, said possible change in Germany's stance on how best to resolve the continent's fiscal crisis raised market expectations.

Berlin had called for austerity measures in exchange for financial assistance to country's such as Greece, but had come under pressure to help seek a compromise that focuses more on economic growth.

Local market watchers, however, said that overall gains were constrained by disappointing manufacturing data from the United States and poor service sector results in China.

Most big caps in electronics, chemicals and heavy industries moved up with some losses being reported in autos and telecommunications.

Market bellwether Samsung Electronics gained 0.59 percent to 1,203,000 won, with No. 2 carmaker Kia Motors adding 0.26 percent to 76,900 won.

LG Chem, a leading manufacturer of rechargeable batteries, moved up 0.56 percent to 267,000 won, with leading refiner SK Innovation jumping 2.79 percent to 129,000 won.

Global steelmaker POSCO gained 1.27 percent to 357,500 won, with shares of Hyundai Heavy Industries, the world's largest shipmaker, rising 1.20 percent to 253,000 won.

Top automaker Hyundai Motor, however, lost 0.21 percent to 233,500 won, with SK Telecom, the country's largest mobile carrier falling 1.19 percent to 124,500 won.

The local currency finished at 1,180.1 won to the U.S. greenback, up 1.9 won from Monday's close.

Bond prices, which move inversely to yields, closed lower. The yield on three-year Treasuries gained 0.02 percentage point to 3.28 percent, while the return on the benchmark five-year government bonds also rose 0.04 percentage point to 3.39 percent.(Yonhap)