Seoul shares advance on China's rate cut

SEOUL, March 2 (Yonhap) -- South Korean stocks ended higher Monday as China's weekend interest rate cut enhanced investor sentiment and Samsung Electronics reclaimed the spotlight with its latest Galaxy smartphones, analysts said. The South Korean won lost against the U.S. dollar.

The benchmark Korea Composite Stock Price Index (KOSPI) increased 11.01 points, or 0.55 percent, to close at 1,996.81. Trading volume was moderate at 355.3 million shares worth 5.43 trillion won (US$4.94 billion), with gainers beating decliners 423 to 400.

Analysts said China's move to lower its key rate on Saturday for the second time in three months boosted risk appetite among investors, pushing up chemicals and consumer goods that rely on the world's second-largest economy.

"China's rate cut is expected to shore up its equity market, which also raised hopes of an influx of money to the Korean stock market," Park Sung-hyun, a strategist at Hanwha Investment & Securities, said. "Although broader economic data and the earnings estimates of Korean firms lack growth momentum, expectations of more liquidity will help offset the negative factors."

Tech giant Samsung Electronics jumped 4.86 percent to 1,423,000 won after it released its new flagship smartphone, the Galaxy S6, with a new design and mobile payment features to take on its U.S. rival, Apple, in the premium phone market. This is the stock's highest level since June 11 and the biggest intraday gain this year.

Petrochemicals benefited from China's rate cut, which provided a buffer against falling oil prices. West Texas Intermediate crude fell 0.6 percent to $49.43 a barrel as the Organization of Petroleum Exporting Countries pumped 30.6 million barrels a day in February.

No. 3 refiner S-Oil advanced 4.32 percent to 67,600 won and Lotte Chemical, a petrochemical unit of Lotte Group, inclined 2.1 percent to 194,500 won.

Builders rallied as investors took heart from positive housing data on the back of government measures aimed at boosting the dull real estate market.

Hyundai Engineering & Construction, a unit of Hyundai Group, soared 9.11 percent to 53,900 won, and Daelim Engineering & Construction gained 5.86 percent to 68,600 won. Shinsegae Engineering & Construction extended its earlier gains to skyrocket 13.49 percent to 69,000 won on expectations that it may expand its leisure business.

In contrast, Dongbu Corporation, a construction affiliate of debt-laden Dongbu Group, tumbled 14.86 percent to 945 won as its equity capital ratio fell to 20 percent at the end of 2014, falling far short of the delisting standards on the Seoul bourse.

The local currency ended at 1,110.80 won against the greenback, down 2.4 won from Friday's close.

ejkim@yna.co.kr
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