* KOSPI gains 1.85 pct
* Banks rise on U.S. bank debt plan
* Doosan Group shares up on easing fears
(Updates to close)
By Jungyoun Park
SEOUL, March 24 (Reuters) - Seoul shares finished at their
highest close in 11 weeks on Tuesday as the U.S. plan to absorb
banks' toxic debt fuelled gains in financials and builders rose
on the local government's economic stimulus measures.
The Korea Composite Stock Price Index finished up
1.85 percent at 1,221.70, the highest close since Jan. 7, but the
gain paled against the 7 percent rise overnight on Wall Street.
"South Korean shares had already reflected the U.S. positives
in the previous session tracking U.S. futures, and the index
currently faces resistance at 1,230 points, near its previous
high," said Kim Se-joong, a market analyst at Shinyoung
Securities.
Financials, including KB Financial Group (105560.KS) and
Shinhan Financial Group (055550.KS), led gains after the U.S.
administration on Monday offered a raft of incentives for private
investors to help rid banks of up to $1 trillion in toxic assets.
[ID:nSP429491]
"(But) whether the current gains in banking issues will be a
trend is another question. It depends on how actively private
investors get involved in buying up toxic bank debt and at what
price," said Ku Yong-uk, an analyst at Daewoo Securities.
KB Financial Group finished up 4.63 percent and Shinhan
Financial Group climbed 3.61 percent.
Doosan Group shares rallied as expectations of stabilising
the economy eased worries about its investment-related risks,
particularly Doosan Infracore's (042670.KS) purchase of Bobcat,
the world's largest maker of construction equipment in 2007.
"As fears about the economy abates a bit, earlier concerns
about Doosan's investment in Bobcat have eased, helping group
affiliates' shares to recover," said Lee Young-yong, an analyst
at Hana Daetoo Securities.
Doosan Infracore (042670.KS) jumped 5.69 percent and Doosan
Corp (000150.KS) spiked 14.58 percent.
Construction issues rallied after South Korea finalised plans
to boost spending by 17.7 trillion won ($12.66 billion) this
year, stoking hopes that it would help reverse a housing market
downturn.
"The stimulus measures fuelled hopes about the economy and
housing market alike," said Han Kang-soo, a market analyst at
Hanwha Securities.
Media reports that the government may lift property
transaction restrictions on the prosperous Gangnam area of
southern Seoul also boosted sentiment, Han added.
Daelim Industrial (000210.KS) climbed 2.91 percent and GS
Construction (006360.KS) jumped 5.3 percent.
But defensive issues underperformed as risk appetite grew
amid easing worries about the financial sector, and after U.S.
government data showed sales of previously owned U.S. homes rose
at their fastest pace in nearly six years in February, offering
some hope to an economy battling a 15-month recession.
[ID:nN23495185]
KT&G (033780.KS), South Korea's tobacco monopoly, lost 2.08
percent and Hanmi Pharmaceutical (008930.KS) declined 2.91
percent.
Local institutions sold a net 170 billion won worth of shares
on the main board, and retail investors sold a net 186.7 billion
won worth. Foreign investors bought a net 363.3 billion won worth
of shares, net buyers for a sixth-consecutive session.
Advancers led decliners by 521 to 287, with 79 titles ending
unchanged.
A total of 505 million shares worth 5.8 trillion won changed
hands, compared with 454 million shares worth 4.6 trillion won
traded on Monday.
The KOSPI 200 June futures index KSc1 rose 2.45 points to
159.60 points and the KOSPI 200 spot index .KS200 was up
3.14 points at 159.56.
The junior Kosdaq .KQ11 market rose 0.77 percent to end at
412.39 points.
Move on day 1.85 percent
12-month high 1,901.13 19 MAY 2008
12-month low 892.16 27 OCT 2008
Change on yr 8.63 percent
All time high 2,085.45 1 NOV 2007
All time low 93.10 06 JAN 1981
(Editing by Nick Macfie)
