South Korean stocks rebounded Wednesday as investors snapped up recently beaten-down brokerage and construction shares despite spreading concerns over financial instability.
The benchmark Korea Composite Stock Price Index (KOSPI) jumped 19.75 points, or 1.4 percent to 1,426.89. Volume was moderate at 360.66 million shares worth 5.09 trillion won ($4.4 billion), with winners outpacing losers 559 to 273.
"Investors seemed to view the recent market plunge as quite excessive, with institutions and foreigners buying mostly undervalued large-cap shares," Park So-yeon, an analyst at Korea Investment Securities, was quoted as saying by Yonhap News. "Brokerage and construction shares surged, driving the overall market gains."
Top brokerage Samsung Securities surged 9.09 percent to 60.000 won, while its rival Mirae Asset Securities jumped 13.62 percent.
Construction shares added to the upward movement as the government's push to ease property-related regulations bolstered investor sentiment. Top builder Daewoo Engineering & Construction surged 11.01 percent and smaller Kumho Industry rose by its daily limit of 14.98 percent to close at 14,200 won.
Recent oil price drops gave a big boost to transportation shares. Top shipper Hanjin Shipping jumped 14.88 percent to 24,700 won while smaller Korea Line advanced 10.25 percent to 156,000 won.
Steel and energy shares, however, closed in negative territory. No. 1 steel maker POSCO lost 2.48 percent to 471,500 won, while oil refinery SK Energy fell 2.17 percent to 76,700 won on concerns that the plunging won could dent its profitability.
On Monday, the price of Dubai crude, South Korea's benchmark, fell to $101.65 per barrel, the lowest in nearly five months. After peaking at $140.22 in mid-July, it has dropped nearly 30 percent.
The tech-savvy Kosdaq market also rebounded in three session despite the won's continuing fall. The Kosdaq index closed at 1,426.89, up 1.4 percent from Tuesday's close.
Despite the government's warnings against one-sided upward movement of the won-dollar exchange rate, the Korean currency continued to plunge. The won closed down 14.5 won at 1,148.5 won, the lowest level since Oct. 7, 2004.