(Updates to mid-morning)
By Park Jung-youn
SEOUL, June 26 (Reuters) - Seoul shares traded slightly
higher on Thursday after the U.S. Federal Reserve kept interest
rates unchanged and downplayed downside risks to growth, but
persistent inflation worries limited the market's gains.
The Korea Composite Stock Price Index was up 0.39
percent to 1,724.51 points as of 0108 GMT.
"(The Fed) rate hold was expected, but follow up comments
hinting that interest rate hike will not happen very soon, as in
the next meeting, helped buoy sentiment," said Lee Sun-yeob, an
analyst at Goodmorning Shinhan Securities.
"But investors are still aware that the Fed's future stance
hinges on inflation, and inflation pressure is here and building
up," Lee added.
The Fed's rate hold, accompanied by a statement saying that
downside risks to economic growth had "diminished," lent support
to exporter issues such as LG Electronics (066570.KS) and Hyundai
Motor (005380.KS).
LG Elec rose 1.59 percent to 127,500 won and Hyundai Motor
edged up 0.39 percent to 76,500 won.
Gains overnight in the U.S. index of semiconductor shares
.SOXX of nearly 2 percent also boosted South Korean chipmakers
such as Samsung Electronics (005930.KS) and Hynix Semiconductor
(000660.KS).
Shares in Hynix were further boosted by a brokerage rating
upgrade to "buy" from "hold," on anticipation its second quarter
results would prove better than expected.
"Hynix's net losses are expected to be smaller in the second
quarter and its numbers may even turn positive by the third
quarter," said Kim Young-june, an analyst at Kyobo Securities, in
the note.
"Market conditions remain challenging, but Hynix will likely
keep its leading position in the market on its technological
excellence."
Samsung Elec climbed 1.22 percent to 663,000 won and Hynix
went up 1.47 percent to 27,550 won.
Meanwhile oil's $2-plus fall to around $134 per barrel also
supported shares sensitive to energy prices such as Korean Air
Line (003490.KS) and Asiana Airlines (020560.KS).
Korean Air went up 1.67 percent to 54,800 won and Asiana
Airlines climbed 1.05 percent to 5,800 won.
