* Seoul shares rise as foreign buying continues for a 4th
* LG Innotek hits more than a year high
* Auto stocks rally on export data, hopes over union
SEOUL, May 22 South Korean shares climbed to a
seven-week high on Wednesday led by automakers after Federal
Reserve officials played down the chances of scaling back the
U.S. central bank's stimulus programme.
Further gains were capped on caution ahead of Fed Chairman
Ben Bernanke's testimony to Congress later in the day.
"Broadly speaking, the market's recovery momentum will
continue through the third quarter this year, fuelled chiefly by
positive effects from global governments' supportive policy
measures," said Park Sung-hyun, an analyst at Hanwha Securities.
Two senior Federal Reserve officials on Tuesday suggested
the central bank will continue its bond buying programme, which
helped push U.S. stocks to record closing highs.
Bernanke is due to testify before the U.S. congressional
Joint Economic Committee at 1400 GMT.
The Korea Composite Stock Price Index was up 0.59
percent at 1,992.78 points at 0145 GMT, after hitting a high of
1,995.20 points, the highest level seen since early April.
The market will however meet resistance at 2,200 points, the
previous high hit in March this year as investors globally
remain conservative about emerging markets, Park said.
Preference for assets denominated in hard currencies such as the
U.S. dollar and Japanese yen may remain strong, Park added.
Foreign investors were buyers of a net 47.7 billion won
worth of stocks, purchasing shares for a fourth straight
LG Innotek shares rallied nearly 6 percent to
more than a year-high, as the maker of light emitting diode
(LED) products and display parts was expected to see its second
quarter operating profit more than double year-on-year, analysts
"LED business, which have been struggling so far, is turning
around robustly. Its smartphone parts business is faring very
well," said Kim Ji-san, an analyst at Kiwoom Securities.
Auto exporters drew support after data late on Tuesday
showed South Korean exports so far this month were roughly flat
from a year earlier, suggesting the impact from the yen's
dramatic slide has so far been less severe than
Hyundai Motor shares advanced 1.5 percent,
lifted further by a media report the company was closer to
reaching an agreement with its union over re-starting weekend
Kia Motors shares, the second most busily traded
share on the KOSPI, advanced 3.7 percent.
Hanjin Shipping shares rose 4 percent after a
successful bond issue. The firm raised 300 billion won in
capital, according to KDB Daewoo Securities, its lead banker.
"[Bond issuance] will not solve its deeper issues -- the
shipping sector's severe downturn -- however it will immediately
help resolve liquidity issues," said Shin Min-suk, an analyst at
Shinhan Investment Corp.
(Reporting by Jungyoun Park; Editing by Sanjeev Miglani)