Korean stocks closed 0.7 percent higher Wednesday as signs of a recovery in the U.S. economy eased concerns over a possible recession, analysts said. The local currency rose to a fresh one-year high against the U.S. dollar.
The benchmark Korea Composite Stock Price Index (KOSPI) rose 13.61 points to 1,955.15. Trading volume was moderate at 493.9 million shares worth 4.16 trillion won ($3.76 billion), with gainers outpacing decliners 459 to 352.
"Good news from overseas markets boosted investor sentiment here," said analyst Lim Su-kyun at Samsung Securities Co. "Particularly, upbeat corporate earnings and consumption data from the United States led the rally."
Expectations rose high that the world's biggest economy can avoid the worst-case scenario and will make a turnaround soon, after U.S. big-name companies reported better-than-expected earnings and U.S. consumer spending rose for September, said Lim.
"These optimistic signs will likely make it possible for the U.S. Fed to implement the planned stimulus plans more easily," the analyst added.
However, he noted that investors are still cautious ahead of the European summit meeting slated for Thursday, staving off further gains in the KOSPI.
Institutions scooped up a net 133.7 billion won worth of shares, and foreign investors bought 23.1 billion won.
Most shares finished in positive territory across the board, led by market heavyweights.
Market bellwether Samsung Electronics gained 0.45 percent to 1,336,000 won and the country's second-biggest home appliances maker LG Electronics rose 2.48 percent to 70,300 won.
Shipbuilders closed bullish, with world's top shipyard Hyundai Heavy Industries gaining 2.13 percent to 240,000 won on a $320 million deal to build a power plant in Saudi Arabia.
Carmakers also gained following a drop in recent sessions due to gloomy third-quarter earnings forecasts. Industry leader Hyundai Motor climbed 0.88 percent to 229,500 won and its smaller affiliate Kia Motor added 0.45 percent to 67,300 won.
Air carriers were among the biggest winners as the local currency gets stronger. Korean Air jumped 3.22 percent to 49,750 won and Asiana Airlines rose 1.31 percent to 6,940 won.
The local currency ended at 1,105.5 won against the greenback, up 1.7 won from Tuesday's close the highest level since Oct. 28 last year, on the back of renewed investor optimism, dealers said. (Yonhap)