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S.Korean shares end higher on institutional buying

06-13-2011 16:41 BJT

SEOUL, June 13 (Xinhua) -- South Korean shares ended 0.1 percent higher on Monday as institutional investors bought more shares than they sold, analysts said.

The benchmark Korea Composite Stock Price Index (KOSPI) edged up 2.07 points, or 0.1 percent, to 2,048.74. Trading volume stood at 215.07 million shares worth 5.51 trillion won (5.07 billion U.S. dollars).

The KOSPI started lower on Wall Street losses last weekend, and dropped to the 2,025 level at one time during the session.

U.S. stock market close sharply lower on Friday amid concerns the world's largest economy might fall into a double-dip recession. The Dow Jones Industrial Average dropped 1.4 percent, keeping its weekly losing run for the sixth straight week.

The main index, however, pared its earlier losses in the afternoon, helped by institutional investors turning to net buyers in the late session.

Local institutions swung to net buyers in the afternoon by purchasing a net 16.2 billion won worth of stocks. Program traders bought a net 382.1 billion won worth of shares, shoring up the key index to end higher.

Foreign and retail investors were net sellers. Offshore investors offloaded 201.1 billion won worth of local stocks, and retail investors dumped 149.6 billion won worth of shares.

Foreigners were net sellers on spots, but became net buyers on futures, indicating foreign views on local stock market turned positive. Overseas investors built up a 6,297 contract of net long positions in stock index futures worth 848.8 billion won.

"The Citi Economic Surprise Index shows the U.S. economic indicators started outperforming economist estimates. It eases concerns over the U.S. economy entering a soft patch," Kang Hyun- gie, an analyst at Solomon Investment & Securities in Seoul, told Xinhua.

Kang attributed the weak economic data in the U.S. to higher global oil prices and supply chain disruptions in Japan following the deadly earthquake, saying those risk factors will disappear as times go by.

"Deteriorating economic data in the U.S. will have insignificant effects on the local stock market," Shim Jae-youb, an equity strategist at Shinhan Investment Corp., said in a report.

Shim noted the U.S. economic indicators coming out this week are expected to be poor, but this will help speed up the Fed's economic stimulus packages.

Banks and steelmakers ended higher on local institutions' buying. Top steelmaker POSCO inched up 0.34 percent to 436,500 won, and KB Financial Group rose 1.76 percent to 52,000 won.

Auto shares also gained ground. The nation's largest automaker Hyundai Motor climbed 1.57 percent to 226,500 won, and its affiliate Kia Motors added 0.43 percent to 70,800 won.

Oil refiners and machinery manufactures, however, lost ground. Leading crude refiner SK Innovation fell 1.12 percent to 220,000 won, and Doosan Heavy Industries & Construction plunged 5.3 percent to 51,800 won.

The local currency finished at 1,085.90 won against the greenback, down 3.30 won from Friday's close.

Bond prices ended lower. The yield on the liquid three-year treasury notes added 0.01 percentage point to 3.66 percent, and the return on the benchmark five-year government bonds rose 0.02 percentage point to 3.93 percent.

Editor:Yang Jie |Source: Xinhua

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