Seoul shares cheered by Bernanke comments; Samsung Elec rallies
* Bernanke comments ease fears over Fed stimulus reduction
* Foreign investors turn net buyers after selling streak
* Large cap, growth-oriented shares rally
By Jungyoun Park
SEOUL, July 11 (Reuters) - South Korean shares rose robustly on Thursday cheered by comments from U.S. Federal Reserve Chairman Ben Bernanke that the Fed will sustain stimulus measures until the labour market outlook improves substantially.
The Fed chairman said on Wednesday that the U.S. central bank will continue to pursue an accommodative monetary policy for now as inflation remains low and the employment rate may be overstating the health of the labour market.
"Bernanke was basically giving market the medicine after having made it sickly. He was basically saying, calm down," said Y.S. Rhoo, a market analyst at Hyundai Securities.
"His comments indicated the Fed wants to see more robust strength in the economy's vital signs before pulling out the support system," Rhoo said, adding such indication came as a relief to investors.
The market also has its eye on China, as growth is expected to slow in the world's No.2 economy. A Reuters poll of economists estimated growth of 7.5 percent in the second quarter compared to a year ago, down from 7.7 percent in the previous three months.
China's current resolve for slower but better-quality growth will be tested, analysts said.
The Korea Composite Stock Price Index (KOSPI) was up 1.6 percent at 1,853.41 points as of 0107 GMT.
Foreign investors were buyers of a net 62 billion Korean won ($54.59 million) worth of stocks, snapping a streak of six selling sessions.
Market heavyweights rallied. Samsung Electronics Co Ltd , the largest component on the main KOSPI, gained 2.9 percent, bouncing for a third straight session after sharp falls last week.
Shares in Hyundai Mobis Co Ltd, the second-biggest stock on the main index, rose 3.5 percent and POSCO, the third-biggest, climbed 2.2 percent.
But defensive sector plays lagged amid a growing preference for growth-oriented large-cap issues.
Shares in telecom firm KT Corp fell 0.4 percent and food processor Lotte Food Co Ltd declined 0.9 percent.
Strength in crude oil prices, which hit their highest in 16 months in the U.S. session, lifted crude oil refiners and chemical firms.
Higher crude oil prices tend to strengthen the pricing of oil and petrochemical products. Shares in SK Innovation Co Ltd climbed 3.6 percent and Lotte Chemical Corp advanced 2.4 percent.
Meanwhile, the market's reaction to Bank of Korea's decision to keep interest rate steady was muted as it was widely expected. Governor Kim Choong-soo is due to hold a news conference from 0220 GMT.
The KOSPI 200 benchmark of core stocks rose 1.9 percent and the junior KOSDAQ traded 1.8 percent higher.
($1 = 1135.7000 Korean won) (Editing by Jacqueline Wong)
- Exclusive: Radar data suggests missing Malaysia plane deliberately flown way off course - sources
- Lost Malaysian airliner may have run out of fuel over Indian Ocean : source |
- Investigators focus on foul play behind missing Malaysia plane: sources |
- UPDATE 1-Rolls-Royce concurs with Malaysia on missing jet's engine data
- UPDATE 2-Satellite data shows missing Malaysia plane may have flown thousands of miles-source