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Seoul: Shares lifted by ECB stimulus hops; won little changed

Thursday, January 22, 2015 - 10:55
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South Korean shares rose on Thursday in line with regional peers as investors bet the European Central Bank (ECB) would unveil bold stimulus measures to support the euro zone's flagging economy.

[SEOUL] South Korean shares rose on Thursday in line with regional peers as investors bet the European Central Bank (ECB) would unveil bold stimulus measures to support the euro zone's flagging economy.

The Korea Composite Stock Price Index (KOSPI) was up 0.3 per cent at 1,927.16 points as of 0205 GMT.

Sources told Reuters that the ECB's executive board has proposed an asset-purchase programme that would enable the ECB to buy 50 billion euros (US$58 billion) in bonds per month starting in March.

"The ECB's stimulus action by itself could only have a limited impact on shares if it doesn't support a bullish turnaround in commodity market sentiments... a recovery in oil prices is crucial," said Kim Joong-won, a market strategist at Meritz Investment & Securities.

Battered energy counters outperformed as crude prices snapped a two-day skid, buoyed by hopes that a slew of investment cuts by global oil companies would bring an end to the supply glut afflicting the market.

SK Innovation, South Korea's largest refiner, gained 3.3 per cent while S-Oil climbed 3.5 percent.

Daewoo Shipbuilding & Marine Engineering soared 6.9 per cent after winning orders to build 4 LNG carriers worth 859 billion won (US$793.5 million).

Nexen Tire surged 7.4 per cent after the US slapped additional anti-dumping duties on imported tires from China. The move seen as an opportunity for South Korean tiremakers to increase their market share.

Steel tubing and pipemakers rallied after Russia said it received positive signals from North Korea after inviting Kim Jong-un to visit, raising expectations that a gas pipeline deal could be reached between the two countries.

Histeel Co, and Dong Yang Pipe both jumped by the daily bourse limit of 15 per cent.

The benchmark KOSPI 200 gained 0.27 per cent while the junior, tech-heavy KOSDAQ rose 0.37 per cent.

The South Korean won was a shade lower against the dollar after being locked in a tight range, as investors awaited the ECB's policy meeting and Friday's data on domestic fourth-quarter GDP.

The local currency was trading at 1,084.5 to the dollar as of 0205 GMT, compared to 1,083.4 quoted at the end of Wednesday's session.

REUTERS