S. Korean shares rebound on hopes for US fiscal cliff avoidance

Source:Xinhua Published: 2012-11-29 16:06:31

South Korean shares rebounded on Thursday from the previous session's loss as hopes for US fiscal cliff avoidance boosted market sentiment.

The benchmark Korea Composite Stock Price Index (KOSPI) advanced 22.07 points, or 1.15 percent, to close at 1,934.85. Trading volume stood at 382.55 million shares worth 4.76 trillion won ($4.39 billion).

The KOSPI started higher, and extended its earlier gains during the trading as investor appetite was spurred by optimism that the so-called fiscal cliff will be averted in the US

Negotiation on the US debt deal resumed this week after the Thanksgiving holiday. Although both Democrats and Republicans expressed willingness to reach a debt deal to avoid the fiscal cliff, investors remained worried as the deadline of Dec. 31 was approaching.

Market sentiment, however, was boosted following US House Speaker John Boehner's comments on a possible compromise with President Barack Obama by the end of the month. President Obama also said that he believes that members of both parties can reach a framework on a debt-cutting deal before Christmas.

Market watchers said the KOSPI reached the three-week high helped by foreign buying, noting that the trading volume of over 4 trillion won hinted at an additional rebound in the local stock market.

Foreigners led the market rebound by purchasing local shares through program-linked transactions that logged net buying worth 300.2 billion won. Offshore investors bought shares worth 45.9 billion won on spots.

Institutional investors purchased a net 268.6 billion won worth of stocks, but retail investors sold a net 323.5 billion won worth of shares.

Auto shares made a strong rise. Top automaker Hyundai Motor advanced 2.67 percent to 230,500 won, and its affiliate Kia Motors jumped 4.73 percent to 62,000 won. The nation's largest auto parts maker Hyundai Mobis climbed 3.19 percent to 291,000 won.

Market bellwether Samsung Electronics inched up 0.07 percent to 1,414,000 won, and the world's No. 1 shipyard Hyundai Heavy Industries increased 3.45 percent to 210,000 won. Top steelmaker POSCO gained 2.24 percent to 319,500 won, and leading chemical firm LG Chem advanced 2.45 percent to 314,000 won.

The local currency finished at 1,084.1 won against the greenback, up 2.4 won from Wednesday's close.

Bond prices ended steady. The yield on the liquid three-year treasury notes closed unchanged at 2.83 percent, and the return on the benchmark five-year government bonds finished flat at 2.90 percent.

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