* China hope buoys market although U.S. fiscal concerns linger
* Samsung Elec boosted by smartphone expectations, not management reshuffle - analysts
By Hyunjoo Jin
SEOUL, Dec 5 (Reuters) - South Korean shares reached their highest closing level in nearly seven weeks on Wednesday, as market heavyweight Samsung Electronics touched a life-time high.
Market sentiment was buoyed by remarks from Chinese Communist Party chief Xi Jinping on Tuesday that Beijing will maintain its fine-tuning of economic policies in 2013 to ensure stable growth of the world’s second-biggest economy.
The Korea Composite Stock Price Index (KOSPI) finished up 0.6 percent at 1,947.04 points, its highest closing level since Oct. 18.
Samsung Electronics, which accounts for an about a fifth of the KOSPI market value, ended up 1.8 percent at a record-high 1,455,000 Korean won ($1,300) after the electronics giant promoted Jay Y. Lee, the heir of the company chairman, to vice chairman on Wednesday.
Analysts and fund managers said Samsung’s record-high share price was driven by growing expectations of its smartphone sales rather than the appointment.
“Samsung shares have been strong recently as earnings forecasts have improved. Asian stocks also gained ground today, led by China, which helped send Samsung shares higher,” said Ahn Sung-ho, a technology analyst at Hanwha Securities.
“I am not that interested in Lee’s promotion. A succession has been in the works and it goes all as planned,” said Ahn Young-hoe, a fund manager at KTB Asset Management.
“Lee has not shown much qualification as the successor. In my view, he is still learning, and doesn’t have a great say in management as his father remains at the top... But Samsung Electronics is big enough not to be swayed by one individual,” he added.
Concerns lingered over whether U.S. lawmakers can break a budget impasse before year-end to avert a possible economic slump.
“Investors will sit on the fence until there is progress in a U.S. fiscal deal,” said Jeon Jong-kyu, an analyst at Samsung Securities.
Optimism over the budget negotiations was dented after President Barack Obama rejected a Republican proposal to resolve the crisis and repeated that any deal must include a rise in income tax rates for the wealthiest Americans.
Financials rebounded after declines on Tuesday, with KB Financial Group up 1.1 percent and Woori Finance Corp climbing 1.2 percent
Among smaller-cap stocks, Neowiz Corp and its affiliate Neowiz Games Corp plunged by the daily limit of 15 percent after a media report said their major shareholder Electronic Arts plans to dispose of the entire 27.35 percent stake the U.S. game publisher has in the two South Korean companies.
In contrast, the shares of nTels surged by the daily limit after media reports that Japanese mobile operator SoftBank Corp has invested 1.6 billion Korean won ($1.48 million) in the South Korean firm.
Foreign investors were net buyers of KOSPI shares for a fifth consecutive session, propping up the index.
Decliners outnumbered gaining shares 444 to 365.
The KOSPI 200 benchmark of core stocks rose 0.7 percent, while the junior KOSDAQ fell 1.2 percent.
Move on day +0.61 percent
12-month high 2,057.28 14 March 2012
12-month low 1,750.60 19 Dec 2011
Change on yr +6.64 percent
All-time high 2,231.47 27 April 2011
All-time low 93.10 6 January 1981
$1 = 1083.4500 Korean won Reporting by Hyunjoo Jin; Editing by Eric Meijer