South Korean stocks finished 0.63 percent higher Monday as foreign investors ramped up holdings following upbeat results from European banks' stress tests, analysts said. The local currency rose against the U.S. dollar.
The benchmark Korea Composite Stock Price Index (KOSPI) added 11.01 points to end at 1,769.07. Trading volume was moderate at 314 million shares worth 5.02 trillion won (US$4.21 billion), with gainers outweighing losers
435 to 350.
"Investors saw the test results of Europe's banks as positive," said Lee Jae-man, an analyst at Tongyang Securities. "Foreign buying was much
stronger than before."
The central bank's release of second-quarter growth data also relieved investor sentiment. The country's economy grew 1.5 percent in the April-June period from the previous quarter, the Bank of Korea said earlier in the day.
"The market did expect the economy to post solid growth in the second quarter, but the results helped ease worries that the economy might fall back into a slump," Lee said.
Foreign investors added a net 154.9 billion won worth of local shares, remaining net buyers for four straight sessions.
Large-cap blue chips, which have underperformed the benchmark index, rebounded bolstered by foreign buying, lending support to the KOSPI.
LG Electronics, the world's No. 3 handset maker that reported a dismal fall in profits in its handset business in the first quarter, rose 4.23 percent to a seven-week high of 103,500 won. JPMorgan Chase & Co. raised its stock recommendation to "overweight" from "neutral" on the expected revival of its handset business from the fourth quarter.
Chip giant Hynix Semiconductor recouped its previous losses on views that the fall of memory chip prices in the second half would be milder than expected. Its shares closed at 23,950 won, up 3.01 percent.
Financial sectors closed mixed. No. 2 financial holding company Woori Finance Holdings added 2.05 percent to 14,950 won. But KB Financial Group, which controls the No. 1 lender, Kookmin Bank, fell 0.97 percent to 51,000
won amid market speculation that it is likely to post a net loss of 300 billion won for the second quarter. The group is scheduled to release its
earnings on Friday.
The local currency closed at 1,191.10 won to the greenback, up 7.70 won from Friday's close, as relief over Europe's ability to handle massive debts stoked investors' appetite for risks, dealers said.