* KOSPI rises 1.13 pct
* Daewoo E&C flies on sales hopes
* Automakers rally after GM's bankruptcy filing
(Updates to mid-morning)
By Jungyoun Park
SEOUL, June 2 (Reuters) - Seoul shares rose on Tuesday with a
strengthening economic outlook on better-than-expected U.S.
manufacturing data boosting sentiment, while Daewoo Engineering
(047040.KS) jumped on sale hopes after a media report.
The Korea Composite Stock Price Index (KOSPI) was up
1.13 percent at 1,431.07 points as of 0128 GMT, rising for a
fourth consecutive session.
Foreign investors were net buyers of 128 billion won ($103.9
million), heading for their 13th straight buying session, the
longest foreign purchasing streak since April 2004, according to
the Korea Exchange.
"General Motors' GM.N bankruptcy filing removed a big
uncertainty and...came in line with a scenario that investors had
in mind," said Suh Dong-pil, a senior market analyst at Hana
Daetoo Securities.
GM filed for bankruptcy on Monday, forcing the 100-year-old
automaker once seen as a symbol of American economic might and
dynamism into a new and uncertain era of government
ownership.[ID:nN01398575]
"The latest batch of economic data, while still weak, came
out better than markets had expected," Suh said, adding that the
main index could near the psychologically significant 1,500-point
level if no unexpected negatives emerged.
U.S. manufacturing sector showed improvement in May,
contracting at a slower rate for the fifth straight month,
according to a report on Monday. [ID:nN01259240]
Shares in Daewoo Engineering & Construction spiked after a
Maeil Business Newspaper report that its majority shareholder
Kumho Asiana group had agreed with creditors to find new
investors to fund its 2006 acquisition of the firm by the end of
July.
Kumho Asiana Group struck put option agreements in its
purchase of Daewoo Engineering that have pressured the group's
financial outlook.
"Expectations that Kumho Asiana Group would eventually have
to sell Daewoo Engineering are boosting appetite for Daewoo
shares," said Heu Moon-wook, an analyst at Samsung Securities.
Shares in Daewoo Engineering shot up 13.45 percent, while
Kumho Industrial (002990.KS), a key Kumho Asiana Group unit,
jumped 6.7 percent.
Automakers including Hyundai Motor (005380.KS) advanced
helped by the news of GM's bankruptcy filing, with expectations
it would give them an opportunity to increase their U.S. market
share, analysts said.
Hyundai Motor gained for a fourth straight session, rising
2.36 percent, and Kia Motors (000270.KS) advanced 3.28 percent.
Energy stocks including SK Energy (096770.KS) also rallied
after oil jumped more than 3 percent to hit a near seven-month
high over $68 a barrel on Monday. [ID:nSP429646]
SK Energy, South Korea's top crude refiner, rose 5.43 percent
and GS Holdings (078930.KS), the holding company of GS Caltex,
South Korea's No.2 refiner, climbed 3.29 percent.
(Editing by Jonathan Hopfner)
