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Seoul: Shares, won gain on hopes global economy can shake off chill

South Korean stocks.jpg

[SEOUL] South Korean shares rose early on Tuesday in line with other markets, encouraged by a rise in US orders and stronger-than-expected factory activity in Germany.

The Korea Composite Stock Price Index (KOSPI) was up 0.5 per cent at 2,044.74 points as of 0233 GMT, after its first rise in five sessions on Monday. Gainers outnumbered losers by 12 to 10.

Global manufacturing growth accelerated to a seven-month high in October but remained muted despite factories cutting their prices at the steepest rate since May 2013, a business survey showed on Monday.

While factory activity in China, South Korea's biggest market, and much of the rest of Asia remained weak, prolonged declines showed some signs of easing.

Traders in Seoul also looked to Europe, another of South Korea's top export destinations, where factories continued to grow at a modest pace.

"If the euro zone maintains its sturdy growth, it will benefit South Korea's exports eventually," said Kang Hyun-gie, a stock analyst at Dongbu Securities.

Companies sensitive to cyclical economic trends led the market. Steel maker POSCO rose 5.3 per cent to 189,000 while petrochemicals producer Hanwha Chemical Corp was up 2.0 per cent to 22,550.

Despite an official denial, Daewoo Shipbuilding & Marine Engineering soared 7.7 per cent to 7,050 on market talk that its creditors were trying to sell the financially troubled shipbuilder to SK Group.

In the currency market, the South Korean won rose 0.2 per cent on the day to 1,134.6 per dollar in line with strength in some of the region's major currencies.

December futures on three-year treasury bonds shed 0.04 points to 109.57 after data showed early in the day annual inflation in October edged up to an 11-month high of 0.9 per cent on the back of the recovering domestic demand.

REUTERS