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Korea stocks end up slightly as rate concerns cool

SEOUL: South Korean stocks shrugged off Wall Street falls and closed slightly higher on Monday as institutional investors shopped for bargains and concerns about a possible rise in local interest rates eased, dealers said.

The Korea Composite Stock Price Index closed up 2.21 points or 0.23 percent at 943.88. "Despite the big losses on Wall Street on Friday, the KOSPI faced strong support as institutional investors hunted for bargains on eased concerns over local interest rates," said Park Hyo-jin, an analyst at Shinhan Securities.

South Korea's long-term interest rates have been on the decline as government steps to ensure liquidity at local investment trusts have soothed concerns that the firms could face a liquidity crunch due to redemptions of beneficiary certificates linked to Daewoo Group bonds.

A ceiling on redeeming such funds is to be raised to 95 from 80 percent on February 8.

The main market, which started off lower after the declines on Wall Street, fluctuated throughout the day due to a fight between profit-taking forces and bargain-hunters.

Profit-takers sold Samsung Electronics, which fell 12,000 won or 4.12 percent to 279,000.

Hyundai Electronics was down 1,300 won to 26,400. SK Telecom pared its earlier losses to end up 10,000 won or 0.27 percent at 3,780,000.

Dacom was up 7,500 won or 2.59 percent to 297,000 and Korea Telecom rose 4,000 won or 3.28 percent to 126,000.

Securities shares also gained on good earnings prospects, brokers said.

Samsung Securities was up 2,900 won to 41,400 and Dongwon Securities climbed 3,850 won to 29,550.

The subindex for securities firms was up 5.77 percent to 2,315.58.

On the broader market, advancers led decliners 442 to 372 with 75 shares unchanged.

Trading volume was moderate with 289.4 million shares compared with 293 million shares on Friday.

Institutional investors bought a net 151.1 billion won worth of shares.

Foreigners sold a net 30.9 billion won worth and retail investors sold a net 98.3 billion won.

Brokers said the main market is expected to move in a tight range on Tuesday as investors are seen refraining from active trade ahead of the US Federal Reserve's monetary policy meeting.

The over-the-counter Kosdaq market index was up 4.30 points or 2.31 percent to 190.37 led by Internet-related shares, including Daum Communicatio.

Daum rose 26,000 won to its daily limit high at 243,000.

The Kosdaq is also seen meeting resistance on Tuesday, brokers said.Reuters