South Korean stocks closed 1.9 percent higher Thursday as Spain's fiscal austerity plans helped subdue concerns over a euro-zone debt crisis, analysts said. The local currency rose 1.4 percent against the U.S. dollar.
The benchmark Korea Composite Stock Price Index (KOSPI) rose 31.55 points to 1,694.58. Trading volume was moderate at 390.1 million shares worth 5.89 trillion won (US$5.21 billion), with gainers outpacing losers 578 to 226.
"Investors were relieved by the news that Spain's plans to cut its fiscal deficit and a successful bond sale by Portugal eased the euro-zone debt fears," said Kwak Joong-bo, an analyst at Hana Daetoo Securities Co. "But as market jitters lingered somewhat, the KOSPI's upswing might be limited."
Foreign investors' appetite for risky assets revived as Spain's plans to cut civil service pay and jobs in the public sector helped ease concerns that Greece's fiscal problems might spill over into other debt-ridden euro-zone countries.
They bought a net 78 billion won worth of Seoul stocks on the main bourse. But the strength of their buying mode eased compared with offshore investors' recent buying spree, indicating that they are still cautious about increased risks from some southern European countries' debt problems.
Tech and bank shares stood out. Market leader Samsung Electronics rose 3.04 percent to 813,000 won and chip giant Hynix Semiconductor advanced 4.47 percent to 26,850 won. Top financial services company KB Financial Group climbed 4.49 percent to 51,200 won and its rival Woori Finance gained 4.32 percent to 16,900 won.
The upcoming share listing of Mando, a supplier of auto parts to top carmaker Hyundai Motor, boosted interests in shares of automakers. Hyundai Motor jumped 5.6 percent to 141,500 won and its affiliate Kia Motors gained 2.81 percent to 31,150 won.
Insurance shares gained ground, led by Samsung Life Insurance. South Korea's top life insurer gained 1.32 percent to 115,500 won on its second day of trading. Samsung Life made its market debut on Wednesday by closing at 114,000 won, up 3.6 percent from its initial public offering price of 110,000 won.
The local currency closed at 1,128 won to the U.S. dollar, up 15.8 won from Wednesday's close, as foreign investors increased their holding of local stocks, dealers said.//Yonhap
