Seoul shares end higher on tech gains

Seoul shares end higher on tech gains

Korean stocks closed higher on Tuesday as investors snapped up major tech shares, helped by shipbuilders rebounding from deep losses on hopes for restructuring measures. The local currency weakened against the U.S. dollar.

The benchmark Korea Composite Stock Price Index (KOSPI) added 5.08 points, or 0.25 percent, to 2,019.63. Trade volume was moderate at 5.02 million shares worth 5.11 trillion won ($4.44 billion), with losers beating gainers 491 to 316.

Analysts said the local index was undergoing price correction following last week’s sharp rise. Investors were waiting for a policy meeting of the U.S. Federal Reserve on Wednesday, which is expected to refrain from interest rate hikes.

“Investors have been selling high-priced stocks to reorganize their portfolio during the earnings season,” Kim Sung-hwan, an analyst at Bookook Securities, said. “Investors are also waiting for the upcoming Federal Reserve meeting to get clues on the rate policy.”

Foreigners scooped up a net 136.21 billion won, while retail investors and institutions offloaded a net 93.5 billion won and 39.82 billion won, respectively.

Tech shares rallied to support the overall index.

Market kingpin Samsung Electronics rose 1.17 percent to 1,296,000 won as analysts projected an upbeat outlook for its first-quarter earnings on the back of strong sales of the Galaxy S7 series. Its earnings report is due on Thursday.

SK hynix, the world’s second-largest chipmaker, jumped 6 percent to 29,150 won despite a sluggish first-quarter profit as investors weighed its investment plan to ramp up its memory chip production capacity this year.

Shipbuilders bounced back from heavy losses after the nation’s top regulator ratcheted up pressure on financially troubled companies to speed up restructuring efforts.

Hyundai Heavy Industries, the world’s largest shipbuilder, gained 3.21 percent to 112,500 won as its first-quarter net profit released before noon swung to black thanks to reduced costs and improvement in its non-shipbuilding business.

In contrast, financials slumped as the government urged local banks to take bolder steps to sort out money-losing companies in the heavy industry sector.

KB Financial Group, the nation’s largest banking group by asset, lost 2.19 percent to 35,700 won, and the state-run Industrial Bank of Korea fell 2.34 percent to 12,500 won.

The combined loans by five shipbuilding and shipping companies subject to the government-led restructuring program amounted to nearly 20 trillion won, according to industry sources.


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