Seoul shares rise on easing Ukraine fears, China growth target

Tue Mar 4, 2014 9:34pm EST

* Main index may break two-day losing run

* Foreigners turn net buyers

SEOUL, March 5 (Reuters) - Seoul shares were up in early trade Wednesday after two losing days as growing hopes that tensions in Ukraine would not escalate into military conflict boosted appetite for riskier assets.

The Korea Composite Stock Price Index (KOSPI) was up 0.9 percent at 1,971.19 points as of 0205 GMT.

Russian President Vladimir Putin said his country reserved the right to use all options to protect compatriots in Ukraine but added that use of force would be a last resort, easing fears about the risk of war.

China also offered additional relief to investors by maintaining a 7.5 percent economic growth target for the current year, though the leaders also announced ambitious reforms that seek to push the country towards more balanced and sustained growth.

"What the market's going through today appears to be a relief rally following signs of stabilisation of Ukraine's crisis, and the fact that China's growth target is in line with market consensus is also having an effect," said Daewoo Securities analyst Kim Hak-gyun.

"Broadly speaking, the stock market should be heading upwards; foreign investors will have no reason to aggressively sell local stocks if global risks continue to ease, so that should also be positive in terms of supply and demand," he added.

Foreigners were net buyers of local stocks in early morning trade, potentially ending two days of outflows.

Advancers outnumbered decliners 557 to 216.

Blue chips Samsung Electronics Co. and Kia Motors Corp. were up 1.4 percent and 0.9 percent, respectively, tracking improved appetite for local stocks in general.

Hyundai Steel Co. rose 3.2 percent while shares of rival steelmaker Posco were up 2.4 percent, as Beijing's 2014 growth target lent hope that China will avoid a hard landing this year -- easing fears of a sharp decline in steel demand there.

The KOSPI 200 benchmark of core stocks was up 1 percent, while the junior KOSDAQ edged 0.8 percent higher. (Reporting by Se Young Lee; Editing by Eric Meijer)

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