SEOUL, Sept 4: South Korean shares rose in early trade today on hopes of stimulus action by central banks to revive growth in the world’s top economies, but the gains were capped by automakers losing ground after poor earnings.
Investors were also hesitant to take strong positions ahead of the release of US manufacturing data later on Tuesday and a policy meeting of the European Central Bank this week.
‘The ECB meeting this week is important, but the US ISM index will also be key, because if these numbers are bad there is a chance things will turn worse,’ said Chung Seung-jae, an analyst at Mirae Asset Securities in Seoul, referring to the Institute for Supply Management’s data on US factory activity.
‘Even if the ECB announces a bond-buying plan, it will be a card that everyone is already aware of.’
The Korea Composite Stock Price Index (KOSPI) was up 0.8 percent at 1,914.21 points as of 0150 GMT on Tuesday, and despite its narrow trading band, the KOSPI is still 8.8 percent higher than lows seen in late July.
Foreign investors were net sellers of 14.3 billion won ($12.64 million) worth of South Korean stocks on Tuesday, while institutions and retail investors were buyers of a net combined 17 billion won worth of shares.
South Korean automakers suffered losses after poor earnings data was released on Monday with Kia Motors and Hyundai Motor Co both falling more than 1 per cent.
Even after its labour union managed to come to a wage deal on Tuesday after its costliest-ever strike, Hyundai Motor’s first sales contraction in more than 3 years dealt a blow even to affiliates Hyundai Mobis and Hyundai Hysco.
Pharmaceuticals outperformed as investors snapped up shares on bargain-hunting, with LG Life Sciences up more than 3 percent and Young Jin Pharmaceuticals gaining 2.8 per cent.
Advancers outnumbeed losers 417 to 347 on the main board, while the KOSPI 200 benchmark of core stocks edged up 0.09 per cent and the junior KOSDAQ rose 0.34 per cent. ($1 = 1131.0500 Korean won)
(AGENCIES)
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