S. Korean Shares, Currency Rise on Improved Sentiment

South Korean stocks closed up 1.44 percent Monday on improved market sentiment following a recent currency swap deal with the U.S. and government's additional stimulus measures aimed at revitalizing the slumping economy. The local currency rose against the greenback.

The benchmark Korea Composite Stock Price Index (KOSPI) jumped 16.02 points to 1,129.08. It marked a gain of three consecutive trading days since the central bank announced a $30 billion currency swap deal with the United States Thursday.

Volume was heavy at 562.61 million shares worth 7.09 trillion won ($5.61 billion), with gainers outpacing losers 660 to 192.

"The currency swap deal and a raft of government measures to stimulate the economy helped ease market concerns," Choi Soon-ho, an analyst at Eugene Investment & Securities, was quoted as saying by Yonhap News. "Retailers came back as a major buyer, sustaining today's advance."

Earlier in the day, South Korea said it will increase government spending by 14 trillion won including expanded budget and tax incentives next year to stimulate the slumping economy and help low-income households tide over the current financial turmoil.

Steep gains caused the Korea Exchange (KRX), the bourse operator, to suspend program trading for five minutes Monday morning after the main index futures prices rose more than 5 percent. The index, however, fell to negative territory at one point, underlining recently excessive volatility.

Shipyard shares continued to rally. Top shipbuilder Hyundai Heavy Industries jumped 2.7 percent to 171,000 won and second-ranked Samsung Heavy Industries surged by its daily limit of 14.95 percent to 22,300 won.

Brokerage and other financial shares added to the upswings. Mirae Asset Securities rose 7.46 percent to close at 67,700 won and Woori Finance Holdings jumped 6.39 percent to 7,160 won.

Tech issues, however, lost ground, with industry leader Samsung Electronics falling 3.55 percent to 516,000 won.

The tech-savvy Kosdaq market surged 5.69 percent to close at 325.56.

The Korean currency closed at 1,262 won to the greenback, up 29 won from Friday, after the government said it will step up efforts to expand currency swaps with China and Japan and increase the sale of bonds to fund currency market operations.