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Seoul shares poised for 3-day rally on EU deal
July 2, 2012 / 2:28 AM / 5 years ago

Seoul shares poised for 3-day rally on EU deal

* EU agreement to buoy markets for the long-haul
    * Laggard oil refiners, shipbuilders outperform
    * LG Int'l up 8 pct on $212 mln Indonesia mine deal

    By Joonhee Yu
    SEOUL, July 2 (Reuters) - Seoul shares edged higher on
Monday morning, poised for a third-straight winning session as
investors welcomed an agreement by euro zone leaders to directly
recapitalize the region's troubled banks and ease soaring debt
costs in Spain and Italy.
    The Korea Composite Stock Price Index (KOSPI) was up
0.22 percent at 1,858.06 points as of 0135 GMT.
    "Europe has finally answered its wake-up call, realizing the
extent of its problems and taking substantial, long-term
measures to bring stability to the markets," said Oh Seung-hoon,
an analyst at Daishin Securities.
    "There are questions remaining to be answered, however,
among which is whether the ESM (European Stability Mechanism) in
its current capacity is adequate for bank recapitalization and
where the additional funds will be sourced from if it is not,"
he added.
    Additional policy action clues may be found at an ECB rate
meeting on Thursday, where most economists polled by Reuters are
expecting a cut in borrowing costs.
    Early gains were highlighted by laggard crude-oil refiners,
with SK Innovation climbing 4 percent while S-Oil
 gained 3.1 percent.
    Shipyards also rallied on the EU pledge to directly inject
funds into the region's cash-strapped banks, which make up the
main global hub of shipping finance.
    Samsung Heavy Industries rose 3.6 percent while
Daewoo Shipbuilding & Marine Engineering advanced
2.1 percent.
    Investors showed a muted reaction to data showing factory
activity in China and Japan slumping to their lowest respective
levels in 7-months, which was seen as widely
expected. 
    "The data wasn't good, but it was expected to be so and it
slightly exceeded forecasts even, so it won't have much of an
impact on sentiment," Oh said.
    Shares in LG International jumped more than 8
percent on Monday after the South Korean trading house said it
had acquired a 242.8 billion won ($212 million) stake in an
Indonesian coal mine, announced via a regulatory filing on
Friday. 
    The Korea Composite Stock Price Index (KOSPI) rose
1.9 percent to close at 1,854.01 points on Friday, but still
wrapped up the second quarter with a loss of nearly 8 percent,
erasing the bulk of its gains earlier in the year.
    

 (Reporting by Joonhee Yu; Editing by Richard Pullin)

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