Seoul: Shares inch higher as retail investors look past North Korea risks

[SEOUL] South Korean shares gained on Wednesday, reversing a more than 1.5 per cent decline in the early session, as retail investors shrugged off worries of rising tensions with North Korea and stayed focused on hopes of economic recovery amid the pandemic.

The Seoul stock market's main Kospi closed up 3.00 points, or 0.14 per cent, at 2,141.05.

Recovery hopes were fuelled by data showing US retail sales increased by the most on record in May after two straight months of sharp declines, offering more evidence the recession triggered by the Covid-19 pandemic was over or drawing to an end.

Shares fell as much as 1.5 per cent in early session after North Korea on Wednesday rejected South Korea's offer to send special envoys to ease escalating tensions over defector activity and stalled reconciliation efforts, vowing to redeploy troops to demilitarised border units.

North Korea issues may increase volatility of stock prices during a session, but it does not tend to have a meaningful impact on the market, said Seo Sang-young, an analyst at Kiwoom Securities.

Shares of South Korean defence-related companies surged due to the heightened geopolitical risks.

Foreigners were net sellers of US$43.00 million worth of shares on the main board.

REUTERS