(Updates to mid-morning)
By Park Jung-youn
SEOUL, July 17 (Reuters) - Seoul shares traded 2.3 percent
higher on Thursday, with financials recovering from the prior
session's sharp losses after a strong finish in Wall Street on a
major U.S. bank's unexpectedly solid results.
Financials such as Kookmin Bank 060000.KS and Shinhan
Financial Group (055550.KS) were helped by their Wall Street
peers' rallies overnight on better-than-expected results from
Wells Fargo Co (WFC.N) that eased worries about the credit crisis
spiraling out of control.
Kookmin rose 4.44 percent to 54,100 won, leading the sector's
gains after a report that South Korea's top commercial lender was
preparing an offer to buy Korea Exchange Bank (KEB) (004940.KS)
if HSBC's (HSBA.L) deal to purchase KEB from majority shareholder
Lone Star fell through.
Lone Star said in a statement on Thursday that it remained
committed to its agreement with HSBC and had held no discussions
on KEB with any other banks.
KEB shares were up 2.8 percent to 12,850 won.
Analysts said that Kookmin's current share price, after its
latest falls on credit worries and talk of delays to the bank's
plans to transform itself into a holding company, had already
factored in any negatives surrounding the firm.
Shinhan Financial Group rose 2.65 percent to 42,600 won, and
Woori Finance Holdings (053000.KS) climbed 2.85 percent to 14,450
won.
The Korea Composite Stock Price Index was up 2.34
percent to 1,542.61 points as of 0105 GMT.
"Wall Street shares' steep rebound and easier oil have
prompted buying from institutions and retail investors, helping
the index make a solid recovery," said Kim Joong-hyun, a market
analyst at Goodmorning Shinhan Securities.
"However it still remains to be seen whether shares are going
to make sustained rebound, as foreign investors keep selling out
of local shares. Eyes are on U.S. bank earnings," Kim added.
Foreigners continued to offload shares for a 29th straight
session on Thursday, dumping 6.2 billion won worth of stocks.
Brokerages also rose across the board, with Samsung
Securities (016360.KS) climbing 4.71 percent to 62,300 won and
Woori Investment & Securities (005940.KS) up 5.74 percent to
19,350 won.
Blue-chip technology issues such as Samsung Electronics
(005930.KS) and Hynix Semiconductor (000660.KS) joined the
recovery, with Samsung Elec up 3.74 percent to 582,000 won and
Hynix up 3.7 percent to 22,450 won.
LG Electronics (066570.KS) climbed 4.67 percent to 112,000
won, shaking off a target price cut by Lehman Brothers on
anticipation of weakening business momentum [ID:nSEO108676].
Transporters and manufacturers such as Korean Air Line
(003490.KS) and Hyundai Motor (005380.KS) also advanced after
U.S. crude CLc1 fell more than $4 to settle at around $134 a
barrel on Wednesday, easing pressure on oil-reliant firms.
Korean Air jumped 6.14 percent to 44,050 won and Asiana
Airlines (020560.KS) gained 4.57 percent to 4,915 won.
Hyundai Motor (005380.KS), South Korea's top automaker, went
up 2.23 percent to 68,900 won and Kia Motors (000270.KS) rallied
6.16 percent to 11,200 won.
Meanwhile shares in Sungwon Corp (012090.KS) shot up the
daily limit of 15 percent to 9,200 won after the company
announced that it had won a 468.7 billion won ($470.7 million)
order from Dubai's roads and transport authority.
DC Chemical Co (010060.KS) rose 3.1 percent to 333,000 won
after the company said on Thursday it had won a 613.7 billion won
($616.3 million) order to supply polysillicon to Taiwan's
Sino-Amerian Silicon Products Inc (5483.TWO).
