SEOUL, May 29: South Korean shares rose on Wednesday, hovering near the 2,000-mark, boosted by a rally on Wall Street and buying by pension funds after a government decision to increase the weighting of stocks in the national pension service’s asset portfolio.
The Korea Composite Stock Price Index was up 0.7 percent at 1999.84 points at 0310 GMT. Shares in Korea Electric Power Corp tumbled more than 5 percent, however, weighed down by news of nuclear reactor shutdowns.
‘The market is recovering to the highs hit earlier this year, but it will be met with strong resistance at 2,020,’ said Choi Kwang-hyeok, a market analyst at E-Trade Securities, referring to the level hit in March this year.
‘The market will move narrowly until well into June, when awaited data from the U.S. And China will offer clearer picture on the economic outlook,’ Choi added.
South Korea’s welfare ministry said the national pension service, the world’s fourth-largest, plans to boost the weighting of stocks and alternative assets in the total over the coming years while cutting that of bonds.
South Korean pensions funds were buyers of a net 13.3 billion won worth of stocks on Wednesday, poised for a sixth straight session of buying.
South Korea said on Tuesday it was suspending the operations of two nuclear power reactors and extended a shutdown of a third to replace cables that were supplied using fake certificates, dragging KEPCO to a five-month low.
‘Nuclear power plants are very energy-efficient, and the shutdown of reactors in the high energy-demand season is worrisome. Supply may come short,’ said Lee Hak-moo, an analyst at Mirae Asset Securities.
Construction firms gained on signs of a revival in the domestic real estate sector and expectations of fresh overseas orders.
Shares in Doosan Engineering & Construction were up 5.8 percent and GS Engineering & Construction rose 2 percent.
‘We are hearing overseas construction deals are close to being signed. Growing warmth in domestic real estate sector is helping smaller construction firms,’ said Park Sang-yeon, an analyst at Shinhan Investment Corp.
Technology and auto firms were also stronger.
LG Display added 3.5 percent and SK Hynix gained 1.1 percent. Hyundai Motor rose 1.5 percent and Kia Motors shares went up 3.1 percent.
(agencies)
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