South Korean stocks ended higher Monday on gains in chemicals, auto and other large caps amid optimism that business outlooks could improve as China, the country’s largest trading partner, is becoming aggressive in stimulating its economy. The South Korean won rose against the U.S. greenback.
The benchmark Korea Composite Stock Price Index edged up 3.21 points, or 0.15 percent, to end at 2,146.71. Trading volume was heavy at 500.69 million shares worth 6.97 trillion won ($6.46 billion), with decliners outnumbering gainers 471 to 350.
“The market reacted to two major global events that caused a tug-of-war between ups and downs throughout the day. One was the so-called Grexit concerns that sparked setbacks in Europe and the other was China’s move to lower the reserve ratio for its banks,” said Cho Ik-jae, an analyst at HI Investment & Securities.
Against this backdrop, shares related to Europe such as shipbuilding companies went down, while those with businesses linked to the Chinese economy such as chemicals surged, he added.
The market got off to a weak start amid growing worries over the upcoming meeting of European countries to discuss how to help the debt-ridden Greece, which raised concerns over a possible exit of Greece from the eurozone.
It clawed back its loses and bounced back later as investors started to positively digest the decision by China’s central bank on Sunday to cut the amount of cash that banks must hold as reserves, a decision seen as a signal that Beijing has a strong will to support its economy.
Chemical stocks surged on improved business outlooks. Market leader LG Chem jumped 8.41 percent to 283,500 won.
Automakers closed higher, with Hyundai Motor adding 2.65 percent at 174,500 won and its smaller affiliate Kia Motors gaining 0.74 percent to 47,850 won.
In contrast, tech giant Samsung Electronics dropped 1.38 percent to 1,430,000 won and its smaller rival LG Electronics fell 0.83 percent to 59,900 won.
Concerns over a possible Greek default soured shipbuilding companies. Hyundai Heavy Industries lost 0.35 percent to 143,000 following a report that its March orders nearly halved from a year earlier. Hyundai Mipo Dockyard also went down 2.21 percent to 88,700 won.
The local currency closed at 1,079.2 won against the U.S. dollar, up 4.5 won from Friday’s close.
Bond prices, which move inversely to yields, ended lower. The yield on three-year Treasury bonds rose 0.2 basis point to 1.693 percent, while the return on the benchmark five-year government bonds gained 1.4 basis points to 1.813 percent. (Yonhap)
