Seoul Shares Jump on US Rescue Plan

South Korean stocks continued their upward momentum Wednesday, ending 4.72 percent higher, as investors snapped up beaten-down financial shares on the U.S. Federal Reserve's rescue plan. The local currency rose against the U.S. dollar.

The benchmark Korea Composite Stock Price Index (KOSPI) climbed 46.46 points to 1,029.78. Volume was moderate at 508 million shares worth 5.07 trillion won ($3.43 billion). Gainers outnumbered losers 651 to 189.

"A series of news like a lifeline for Citigroup and the Fed's fresh rescue plan generally lifted investor sentiment," Lee Kyoung-su, an analyst at Taurus Investment & Securities, was quoted as saying by Yonhap News.

Foreign investors snapped up a net 121.7 billion won worth of local stocks on the Seoul bourse, becoming net buyers for the first time in four sessions. The Fed unveiled a $800 billion plan Tuesday to buy mortgage-backed assets and help boost lending for consumers.

U.S. stocks closed mixed Tuesday as investors were heartened by the Fed's plan, but dismal economic data weakened sentiment. The Dow Jones industrial average added 0.43 percent while the tech-dominated Nasdaq composite index shed 0.5 percent.

But analysts said it remains to be seen whether the local stock market will likely continue its rally amid mounting concerns over a global economic recession.

"A batch of U.S. economic data sparked concerns over a global recession. This may limit a possible upturn of the Seoul stock market," Bae Sung-young, an analyst at Hyundai Securities, was quoted as saying.

Financial shares, led by bank and securities issues, were powered up by the Fed's plan. Analysts also said the bank gain came as the country's top financial regulator said that now is not the time for the government to pour public funds into local banks, as the difficulties they face do not warrant an overhaul.

Woori Finance Holdings, the country's top financial services firm, jumped by the daily limit of 15 percent to 5,930 won and KB Financial Group, the holding company of Kookmin Bank, also soared 15 percent to 27,600 won. Leading brokerage Daewoo Securities gained 14.89 percent to 9,570 won.

But No. 2 shipping line Hyundai Merchant Marine lost 1.29 percent to 34,400 won after North Korea said Monday that starting next week, it will suspend a cross-boarder train service and selectively expel South Koreans working at a joint industrial complex in the city of Gaeseong. Hyundai Merchant has a 36.9 percent stake in Hyundai Asan, an affiliate of Hyundai Group, which engages in inter-Korean economic projects.

The local currency closed at 1,478.10 won to the dollar, up 24.2 won from Tuesday's close.