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S.Korean shares jump on Fed's positive assessment

03-14-2012 16:07 BJT

SEOUL, March 14 (Xinhua) -- South Korean shares rose for two straight days on Wednesday as foreign investors kept their buying streak on the local stock market following the U.S. Federal Reserve's positive assessment on the world's largest economy, analysts said.

The benchmark Korea Composite Stock Price Index (KOSPI) jumped 20.04 points, or 0.99 percent, to close at 2,045.08. Trading volume stood at 534.81 million shares worth 6.31 trillion won (5. 61 billion U.S. dollars).

The KOSPI took a solid start, and stayed in positive terrain throughout the session after the Federal Open Market Committee ( FOMC), the U.S. policy rate setting panel, boosted confidence on the country's economic recovery.

The FOMC said that the U.S. economy has kept its moderate growth, and the unemployment rate has declined notably in recent months. The panel also noted that strains in global financial markets eased despite the lingering downside risks to the economic outlook.

Adding to upward momentum, the U.S. retail sales painted a rosy picture. Retail sales rose 1.1 percent in February, posting the second consecutive month of increasing.

"The FOMC made an assessment that the U.S. economy continued to improve despite downside risks. Positive results of the U.S. retail sale data also boosted market sentiment," Park So-yeon, an analyst at Korea Investment & Securities in Seoul, told Xinhua.

Park said that recent resumption of foreign buying bolstered views that foreigners were seeing the South Korean market from the positive perspective, but the analyst warned that the KOSPI was expected to take a breather for the time being as most of positive news came out.

Offshore investors led the market rally. Foreigners bought a net 516.4 billion won worth of local shares, and local institutions purchased a net 56.6 billion won worth of shares.

Retail investors, however, limited the KOSPI's further gain by offloading a net 479.4 billion won worth of shares in a bid to lock in recent profits.

Most large-cap shares ended bullish. Market bellwether Samsung Electronics led the rally to close at a new high of 1,250,000 won, up 2.38 percent against Tuesday's close. The tech shares surged earlier to a new trading high of 1,255,000 won. The country's consumer electronics giant LG Electronics gained 1.98 percent to 92,900 won, and top steelmaker POSCO rose 0.5 percent to 399,000 won.

Shipbuilders gained ground on expectations for drill ships and LNG carriers amid rising oil prices. The world's largest shipyard Hyundai Heavy Industries advanced 2.15 percent to 333,000 won, and its rival Samsung Heavy Industries jumped 4.77 percent to 41,750 won.

Auto shares ended bullish ahead of the implementation of the Korea-U.S. free trade deal. The nation's No.1 carmaker Hyundai Motor rose 0.67 percent to 225,000 won, and top auto parts maker Hyundai Mobis edged up 0.17 percent to 292,500 won.

The local currency finished at 1,126.1 won against the greenback, down 4.6 won from Tuesday's close.

Bond prices ended lower. The yield on the liquid three-year treasury notes advanced 0.04 percentage points to 3.52 percent, and the return on the benchmark five-year government bonds gained 0.03 percentage points to 3.62 percent. (1 U.S. dollar equals 1126. 1 won)

Editor:Wang Lingfei |Source: Xinhua

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