SEOUL (Reuters) - Seoul shares rallied on Wednesday to touch a fresh, 7-month intraday high and surpass a key chart level, after U.S. equities had their best day of the year on a stronger economic outlook from the Federal Reserve and upbeat retail sales data.
The Korea Composite Stock Price Index was up 1.49 percent at 2,055.13 points as of 0150 GMT. That was just shy of the 7-month intraday high posted earlier in the day and above the 2,050 barrier, breached after two failed attempts in recent weeks.
“Financials were the main catalyst in the rally, with confidence in the banking sector boosted after most U.S. banks successfully passed a stress test. A push towards 2,100 looks feasible, but it will need the backing of strong corporate earnings,” said Lee Eun-taek, an analyst at Dongbu Securities.
Spearheading the rally were financials, after their Wall Street peers lifted U.S. stocks to their best performance in 2012. In the U.S., most major banks passed a Fed stress test with flying colors and JPMorgan’s dividend hike bolstered investor confidence in the banking sector.
KB Financial Group (105560.KS) shares rose 3.49 percent while Korea Exchange Bank 004940.KS climbed 2.5 percent.
Woori Finance Holdings 053000.KS outperformed peers to soar 4.8 percent on hopes of a renewed privatization push after sources said on Tuesday an extension deal with sales managers was in the works, on the heels of a Monday announcement by South Korea’s top regulator stating its intention to restart the bidding process.
Shipbuilders lent strong support with analysts seeing increased export orders, especially from the Middle East. Daewoo Shipbuilding & Marine Engineering (042660.KS) rallied 4.98 percent while Samsung Heavy Industries (010140.KS) soared 4.77 percent.
Tech heavyweight Samsung Electronics (005930.KS), which accounts for 10 percent of the KOSPI’s market capitalization, rose 2.78 percent to a record high and then eased to be up 2.21 percent for the day.
The KOSPI has risen more than 12 percent this year, and most analysts see the index constrained 2,050 and 2,100 unless good corporate earnings provide new momentum.
Editing by Richard Borsuk