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Seoul: Stocks jump on robust economic growth, Wall Street
[SEOUL] Seoul shares jumped early on Friday as South Korea posted its highest quarterly growth in six quarters, boosting investor sentiment with strong support from US stocks overnight.
South Korea's economy grew a seasonally adjusted 1.1 per cent in January to March, nicely topping an earlier estimate of 0.9 per cent.
The Korea Composite Stock Price Index (Kospi) was up 0.9 per cent at 2,366.47 points as of 0156 GMT, close to Monday's record-high intraday level of 2,371.67.
The Dow Jones Industrial Average rose 135.53 points, or 0.65 per cent, to end at 21,144.18, the S&P 500 gained 18.26 points, or 0.76 per cent, to 2,430.06 and the Nasdaq composite added 48.31 points, or 0.78 per cent, to 6,246.83.
Rhoo Yong Seok, a stock analyst at KB Securities, said both local and global economic indicators were pointing at further Kospi gains, with strong market sentiment likely to last for a while.
"After yesterday's strong imports data, investors have started to believe that even domestic demand in South Korea is improving. And now that the GDP is this strong another Kospi rally seems quite obvious," he said.
While South Korea's May exports showed a double-digit growth of 13.4 percent, imports soared a faster 18.2 per cent to US$39.05 billion, topping expectations for a 14.6 per cent gain. This resulted in a trade surplus of US$5.99 billion.
Foreign investors were poised to be net buyers, purchasing 234.8 billion Korean won (S$290.36 million) worth of Kospi shares near mid-session, supporting the index.
Tech giant Samsung Electronics gained 2.5 per cent while LG Electronics rose nearly five per cent on market forecasts that IT shares will continue to be robust.
The South Korean won edged up 0.2 per cent to 1,119.7 against the US dollar versus Thursday's close of 1,122.0.
June futures on three-year treasury bonds shed 0.02 point to 109.59.