Seoul shares end up 2.1 pct on institutional buying

(ATTN: ADDS bond yields at bottom)
SEOUL, Dec. 5 (Yonhap) -- South Korean stocks ended 2.14 percent higher Friday as
institutional investors picked up steel and transportation shares, shrugging off
overnight losses on Wall Street, analysts said. The local currency rose against
the U.S. dollar.
The benchmark Korea Composite Stock Price Index (KOSPI) climbed 21.59 points to
1,028.13. Volume was moderate at 391.2 million shares worth 3.58 trillion won
(US$2.43 billion). Gainers outnumbered losers 504 to 301.
"Institutional buying lifted the broader market. Despite the local market's run,
there is still caution among investors against any possible negative news related
to tightened credit conditions," said Park Suk-hyun, an analyst at Eugene
Investment & Securities Co.
Park said the South Korean market is likely to trade in a narrow range next week
as investors may take a breather ahead of a rate decision by the Bank of Korea
and the expiration of options.
Gains by steelmakers and auto shares led the market's run. Industry leader POSCO
jumped 5.67 percent to 344,500 won on expectations that steel prices may hit
bottom.
Carmakers gained ground on the back of reports that the government is considering
granting extensive tax cuts to local automakers struggling with weakening
domestic and overseas demand. Top carmaker Hyundai Motor rose 5.05 percent to
39,500 won and its affiliate Kia Motors advanced 7.14 percent to 6,900 won.
But Doosan Corp., the flagship unit of Doosan Group, declined 2.26 percent to
82,000 won on reports that it is considering selling its liquor unit.
U.S. stocks closed sharply lower Thursday as dismal economic data pointed to a
deepening of the economic recession. The Dow Jones industrial average declined
2.51 percent and the tech-dominated Nasdaq composite index fell 3.14 percent.
After volatile trading, the local currency closed at 1,475.5 won to the dollar,
up 1.5 won from Thursday's close, as offshore investors snapped up local stocks,
dealers said.
Bond prices, which move inversely to yields, rose sharply on hopes for a rate
cut. The return on three-year Treasuries fell 0.16 percentage point to 4.17
percent and the benchmark yield on five-year government bonds also declined 0.16
percentage point to 4.42 percent.
sooyeon@yna.co.kr
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