South Korean stocks bounced back in holiday-thin trading Wednesday as investors were bouyed by surprise economic growth in the U.S. that was the fastest in more than a decade, analysts said. The local currency ended nearly flat against the greenback.
The benchmark Korea Composite Stock Price Index (KOSPI) scored 7.59 points, or 0.39 percent, to 1,946.61. Trading volume was light at 279.4 million shares worth 2.78 trillion won (US$2.52 billion), with gainers far surpassing decliners 502 to 291.
Foreigners shifted to buyers for a net 70.5 billion won of local stocks after 10 consecutive days of selling on hopes for U.S. economic recovery.
The Dow Jones industrial average broke through 18,000 points for the first time Tuesday, underpinned by the encouraging data that the world's largest economy grew 5 percent in the third quarter, the best performance in 11 years.
Institutions bought a net 139.4 billion won, extending their buying for eight days in a row in their year-end stock investment, while retail investors dumped a net 235.6 billion won.
"Easing woes in the global economy and the positive U.S. economic data revived the risk appetite among foreign investors," Kim Ji-woon, an analyst at Shinhan Securities, said. "Year-end short-covering by institutions also boosted the benchmark index."
Auto shares rallied following news that Hyundai Motor may raise dividend payouts for the year, which was confirmed in a regulatory filing released shortly before the market closing.
Hyundai Motor, the nation's largest automaker, surged 2.04 percent to 175,000 won, the biggest intraday gain in three weeks, and its sister company Kia Motors gained 0.75 percent to 53,800 won. Auto parts affiliate Hyundai Mobis also rose 2.14 percent to 238,500 won.
Investors snapped up construction shares after the parliament on Tuesday passed real estate laws aimed at easing regulations.
Hyundai Development Company jumped 5.12 percent to 40,000 won, and Daewoo Engineering and Construction advanced 2.41 percent to 5,940 won.
Cheil Industries, Samsung Group's de facto holding firm, shed 1.48 percent to 133,000 won on profit-taking, ending the four-day winning streak since its listing on Thursday.
The local currency closed at 1,102.60 won against the U.S. dollar, up 0.1 won from Tuesday's close.
The Seoul bourse is closed on Thursday for the Christmas holiday. (Yonhap)