Seoul shares up on U.S. fiscal hope; shipbuilders lead

Sun Nov 18, 2012 9:06pm EST

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SEOUL Nov 19 (Reuters) - Seoul shares gained ground Monday morning after last week's losses, buoyed by signs that U.S. politicians were working to avert a budget crunch of mandatory tax hikes and spending cuts.ลก

The Korea Composite Stock Price Index (KOSPI) ticked 0.88 percent higher at 1,877.18 points as of 0150 GMT. The KOSPI fell 2.3 percent last week and reached its lowest close since Aug 3 on Friday.

Investors snapped up beaten-down shares, leading the index higher, said Lim Dong-rak, an analyst at Hanyang Securities.

U.S. shares went up on Friday after rival party leaders pledged to find common ground on taxes and spending that would allow them to avert an upcoming "fiscal cliff" that could send the economy back into recession.

Shipbuilders led the increase, with STX Offshore & Shipbuilding rallying 7 percent and Hyundai Heavy Industries up 3.3 percent.

"Shipbuilders, which are very sensitive to changes in the index, were casualties of the bear market last week. They are now recouping losses," said Lee Yoon-sang, a sector analyst at NH Securities.

Index heavyweight Samsung Electronics was up 1.8 percent, leading the tech sector's gains ahead of the U.S. year-end shopping season which kicks off on Friday. SK Hynix moved up 2 percent, while LG Display was traded up 1.5 percent.

Shares in Daewoo International were up 1.6 percent after the company said on Monday that it signed a deal to build a $1.3 billion power station in Kilifi County, Kenya.

Most stocks were on the rise, with gaining shares outnumbering winners 591 to 182.

The KOSPI 200 benchmark of core stocks was up 0.9 percent, while the junior KOSDAQ edged 1.9 percent higher. (Reporting By Somang Yang; Editing by Eric Meijer)

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