Seoul shares hit near 3-week high on Yellen remarks, China data

Tue Feb 11, 2014 9:52pm EST

* Market welcomes new Fed chief's testimony

* Hanwha Corp up after court decision on chairman

* GS E&C rises, Daewoo E&C falls after contract in Kuwait

SEOUL, Feb 12 (Reuters) - Seoul shares touched an almost three-week high on Wednesday morning after encouraging comments by U.S. Federal Reserve chief Janet Yellen, while better-than-expected China trade data aided risk appetites.

The Korea Composite Stock Price Index (KOSPI) was up 0.5 percent at 1,940.77 points as of 0226 GMT after hitting an intraday high of 1,942.23, highest since Jan. 24.

Yellen, testifying on Tuesday before the House Financial Services Committee, expressing confidence in the U.S. economy and said recent volatility in global financial markets did "not pose a substantial risk to the U.S. economic outlook."

The Fed's commitment to continued reduction in bond-purchasing stimulus "isn't friendly to emerging markets as it prompts capital outflow, but investors are more focusing on Yellen's unchanged view of the U.S. economy," said Kim Byung-yeon, an analyst at Woori Investment & Securities.

Kim added that if there's reduced external volatility after this week's batch of China data and options expiry in Seoul on Thursday, the domestic market may be expecting gains.

China's exports handily beat expectations in January, rising 10.6 percent from a year earlier, while imports jumped 10 percent, data showed on Wednesday.

Retail investors were net buyers of 53.7 billion won ($50.2 million) of KOSPI shares near mid-session, offsetting offshore investors' 40.1 billion won of net selling.

Hanwha Corp gained 2.4 percent after group chairman Kim Seung-youn on Tuesday received a suspended sentence on a breach of trust charge, dissipating concerns about ownership. Affiliate Hanwha Chemical rose 2.3 percent.

GS Engineering & Construction Corp rose 2.6 percent while Daewoo Engineering & Construction Co Ltd fell 1.5 percent.

Both companies, in regulatory filings on Wednesday, said they were awarded a project to improve and expand oil factories in Kuwait.

Hyundai Motor Co slipped 1.3 percent as investors locked in profits following a recent 3 percent gain.

Advancers outnumbered decliners 475 to 295.

The KOSPI 200 benchmark of core stocks was up 0.5 percent, while the tech-heavy junior KOSDAQ edged 0.4 percent higher. ($1 = 1070.8500 Korean won) (Reporting by Jungmin Jang; Editing by Richard Borsuk)

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