Seoul shares seen buoyed by U.S. fiscal deal; autos lag
SEOUL, Jan 3 (Reuters) - Seoul shares are likely to climb further on Thursday following a global stocks rally when U.S. legislators struck a deal to halt a round of automatic fiscal tightening that threatened the world economy. "The index is seen continuing to rally this week, following U.S. equities, which got a bigger-than-expected bounce," said Lee Seon-yeob, an analyst at Shinhan Investment. While the United States avoided the 'cliff', the world's largest economy still faces bruising budget battles over cutting the deficit and raising the debt ceiling in two month's time. Lee said automakers will continue to suffer as the won strengthens while the Japanese yen weakens, eroding the overseas price competitiveness of South Korean cars. The won jumped to a 16-month high against the dollar on Wednesday and prompted the finance minister to warn that the government may intervene to "curb one-way bets" against it. The Korea Composite Stock Price Index (KOSPI) closed up 1.7 percent on Wednesday, the biggest daily percentage gain since mid-September, at 2,031.10 points. ------------------MARKET SNAPSHOT @ 22:28 GMT------------------- INSTRUMENT LAST PCT CHG NET CHG S&P 500 1,462.42 2.54% 36.230 USD/JPY 87.29 -0.06% -0.050 10-YR US TSY YLD 1.835 -- 0.079 SPOT GOLD $1,685.49 -0.05% -0.860 US CRUDE $93.12 1.42% 1.300 DOW JONES 13412.55 2.35% 308.41 ASIA ADRS 136.04 2.70% 3.58 ------------------------------------------------------------- >WallSt starts a year with a bang after 'cliff'deal >Budget deal pushes benchmark yields to 3-month high >Dollar falls vs high-yielding currencies;yen sinks >Oil rises on US fiscal deal,hits highest since Oct ---STOCKS TO WATCH--- **DAEWOO ENGINEERING & CONSTRUCTION ** Daewoo Engineering said late on Wednesday that Kele Saudi Arabia Limited cancelled a 356 billion won ($334.74 million)order. The contract, signed in November 2011, was for construction service at the Salman Bay housing project. **CHINA GAOXIAN FIBRE FABRIC HOLDINGS ** China Gaoxian Fibre Fabric Holdings said in a regulatory filing on Wednesday that it may request an extension from Singapore Exchange to work out a deal to sell a controlling stake to Fleur Capital Pte. Ltd. The proposed deal is worth $27 million. **KOREA ELECTRIC POWER CORP (KEPCO) ** State-owned utility KEPCO rose 3.6 percent on Wednesday to a 2-year high price of 31,550 Korean won ($29.67) after broker Daishin Securities raised its target price from 36,000 won to 41,000 won, citing the likelihood that the incoming administration will raise electricity fees which will lead to better earnings. A second nuclear reactor run by a KEPCO subsidiary, which was shut down to replace parts supplied with forged quality documents, was restarted late on Wednesday. ($1 = 1063.5000 Korean won) (Reporting By Somang Yang; Editing by Eric Meijer)
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