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Seoul: Shares up as energy counters rally on oil rebound; won slips
[SEOUL] South Korean shares were up nearly 1 per cent on Monday, led by sharp gains in commodity-linked sectors as oil prices rebounded to halt a seven-week skid.
The Korea Composite Stock Price Index (KOSPI) was up 0.96 per cent at 1,906.17 points as of 0205 GMT.
Sentiment was further boosted by growing speculation the European Central Bank (ECB) will launch bolder easing measures after Switzerland unexpectedly dropped its currency cap against the euro last week.
"The markets were rattled by Switzerland's move last week, but they have recovered quickly and stimulus hopes out of Europe as well recovering oil prices have set the stage for an accelerated rebound," said Lee Kyung-min, an economist at Daishin Securities.
Foreign investors bought a net 27.2 billion won (US$25.2 million) of KOSPI shares by late morning, positioning them to snap a five-day selling streak.
Analysts say the easing of worries over plunging commodity prices and the cost of a possible Greek exit from the euro zone, coupled with the prospects of ECB money-printing, should boost offshore buying.
Shipyard and energy counters outperformed. Daewoo Shipbuilding & Marine Engineering soared 6.4 per cent and SK Innovation, South Korea's largest refiner, jumped 7 per cent.
Casino operators rallied after South Korea said on Sunday it will approve construction of two new casino resorts. KOSDAQ-listed Paradise Co rose 3.4 per cent and Grand Korea Leisure Co climbed 4 per cent.
Samsung Techwin shares were up 6 per cent, extending gains after announcing it won a US$430 million contract to build engine components for General Electric .
The South Korean won edged lower against the dollar as the greenback found support from data showing US consumer sentiment at an 11-year high, further signs that the world's largest economy was on a healthy track.
The local currency was quoted at 1,080.1 to the dollar as of 0205 GMT, retreating from a 2-1/2 month closing high of 1,077.3 at the end of Friday's session.
March futures on three-year treasury bonds shed 10 basis points to trade at 108.46.