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Seoul shares up on technicals after touching 1-mth low
April 5, 2012 / 7:59 AM / 6 years ago

Seoul shares up on technicals after touching 1-mth low

* KOSPI finds support after falling below 2,000

* Autos extend rally on strong sales, outlook

* SK Hynix up as Toshiba reportedly seeks joint Elpida bid

By Joonhee Yu

SEOUL, April 5 (Reuters) - Seoul shares ended slightly higher on Thursday after sinking to a near one-month low earlier in the session, initially weighed by worries over a weak Spanish bond auction and dashed hopes of additional U.S stimulus, but later rebounding at a key support level.

The Korea Composite Stock Price Index (KOSPI) finished up 0.5 percent at 2,028.77 after falling as much as 1 percent during morning trade to inch below the psychologically significant 2,000-point level that triggered strong technical support.

“Early on, the index extended Wednesday’s fall on dashed QE3 hopes compounded by worries of possible fallout from Spain, but the market showed strong resilience in defending the 2,000 point threshold with investors viewing the correction as exaggerated,” said Lim Dong-rak, an analyst at Hanyang Securities.

The focal point of the rally was centered around earnings-driven stocks in the automobile and technology sectors expected to yield strong first-quarter results.

Automakers were highlight performers, riding strong U.S. sales figures and a positive outlook on earnings and future business conditions. Hyundai Motor Co climbed 4.1 percent while KIA Motors Corp gained 3.3 percent.

SK Hynix Inc led sector peers to finish up 1.5 percent after the Nikkei reported that Toshiba Corp may abandon its solo bid for Japanese memory chip maker Elpida to team up with SK Hynix for a joint takeover.

Institutions reverted to being net buyers after dumping the most shares in two months on Wednesday, picking up a net 110.4 billion won ($97.7 million) worth on the day.

“Massive fund redemptions weighed on the index on Wednesday, with Allianz clients cashing out with 300 billion won worth of shares, while SEI Asset sold 98 billion won. Investors felt the market was in oversold territory and began seeing bargains again,” said Ham Sung-sik, an analyst at Daishin Securities.

Liquidity-dependant, high-beta stocks curbed losses as the main bourse rebounded, but still closed in the red with fundamentals seen lacking amid an earnings-focused market.

Brokerages were leading underperformers. Hyundai Securities Co Ltd fell 2.3 percent, while Mirae Asset Securities Co Ltd shed 1.2 percent.

KT&G Corp, South Korea’s leading tobacco-maker, gained 2.8 percent after announcing plans to release a new luxury cigarette brand co-developed with Italian carmaker Lamborghini later this month.

The KOSPI 200 index rose 0.61 percent, while the junior KOSDAQ index inched 0.07 percent higher.

541.8 million shares exchanged hands on the main bourse, with decliners outnumbering winners 442 to 358.

$1 = 1129.5000 Korean won Additional Reporting by Seongwon Chang; Editing by Chris Lewis

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