* Seoul market taking cues from moves in yen, won
* Support not expected to last as yen seen weakening further
* Woongjin Holdings up 14 pct on report of founder’s support
By Joyce Lee
SEOUL, Jan 22 (Reuters) - South Korean shares rose on Tuesday, with technology and auto sectors gaining ground after the yen firmed as the Bank of Japan announced an open-ended commitment to asset purchases but said the new scheme would not take effect until next year.
A stronger yen weighs on earnings of Japanese exporters and lessens their competitiveness, which in turn benefits their South Korean rivals.
The Korea Composite Stock Price Index (KOSPI) rose 0.5 percent to close at 1,996.52 points, its highest finish since Jan. 14 and nearly matching its 20-day moving average.
“We’ve had gains in sectors that were hardest hit by concerns about the weak yen,” said Kwak Joong-bo, an analyst at Samsung Securities.
The yen has weakened substantially since new Japan Prime Minister Shinzo Abe began campaigning for the BOJ to aggressively act to end deflation. The dollar has risen nearly 14 percent versus the yen from a trough hit back in mid-November, hitting a 2-1/2 year high on Monday.
Local tech and auto shares had fallen 6.9 and 5.9 percent respectively between Jan. 2 and Monday while the dollar rose 2.6 percent against the yen.
Market heavyweight Samsung Electronics Co Ltd rose 1.8 percent on Tuesday while Hyundai Motor Co added 1.9 percent. The two firms account for 21 percent of the KOSPI’s market capitalisation.
But analysts warned that the yen is expected to remain under pressure.
“Exporters such as Samsung Electronics were bullish as there were brief signs of the won weakening against the dollar, but it’s too early to say this is a turning of the tide,” said Shim Jae-yeop, an analyst at Shinhan Investment Corp.
Shares in Woongjin Holdings Co Ltd rose by their daily limit of 15 percent after local media reported Woongjin Group founder Yoon Seok-keum is expected to contribute an undetermined amount of his private fortune to revive the financially troubled company.
Korea Gas Corp (KOGAS) closed down 6.8 percent after local media said it had scrapped the idea of issuing some $5 billion in asset backed securities against unpaid utility fees.
S&T Corp rose 6.8 percent after it won a $38.7 million order to provide heat recovery steam generators to General Electric Co in Australia by July 2014.
Advancing shares nearly matched decliners 406 to 401. The KOSPI 200 benchmark of core stocks closed up 0.6 percent, while the junior KOSDAQ edged 0.4 percent lower.
Move on day +0.49 percent
12-month high 2,057.28 14 March 2012
12-month low 1,769.31 25 July 2012
Change on yr -1.7 percent
All-time high 2,231.47 27 April 2011
All-time low 93.10 6 January 1981 ($1 = 1062.9000 Korean won) (Editing by Edwina Gibbs)