* Bernanke comments ease fears over Fed stimulus reduction
* Foreign investors turn net buyers after selling streak
* Large cap, growth-oriented shares rally
By Jungyoun Park
SEOUL, July 11 South Korean shares rose robustly
on Thursday cheered by comments from U.S. Federal Reserve
Chairman Ben Bernanke that the Fed will sustain stimulus
measures until the labour market outlook improves substantially.
The Fed chairman said on Wednesday that the U.S. central
bank will continue to pursue an accommodative monetary policy
for now as inflation remains low and the employment rate may be
overstating the health of the labour market.
"Bernanke was basically giving market the medicine after
having made it sickly. He was basically saying, calm down," said
Y.S. Rhoo, a market analyst at Hyundai Securities.
"His comments indicated the Fed wants to see more robust
strength in the economy's vital signs before pulling out the
support system," Rhoo said, adding such indication came as a
relief to investors.
The market also has its eye on China, as growth is expected
to slow in the world's No.2 economy. A Reuters poll of
economists estimated growth of 7.5 percent in the second quarter
compared to a year ago, down from 7.7 percent in the previous
China's current resolve for slower but better-quality growth
will be tested, analysts said.
The Korea Composite Stock Price Index (KOSPI) was up
1.6 percent at 1,853.41 points as of 0107 GMT.
Foreign investors were buyers of a net 62 billion Korean won
($54.59 million) worth of stocks, snapping a streak of six
Market heavyweights rallied. Samsung Electronics Co Ltd
, the largest component on the main KOSPI, gained 2.9
percent, bouncing for a third straight session after sharp falls
Shares in Hyundai Mobis Co Ltd, the
second-biggest stock on the main index, rose 3.5 percent and
POSCO, the third-biggest, climbed 2.2 percent.
But defensive sector plays lagged amid a growing preference
for growth-oriented large-cap issues.
Shares in telecom firm KT Corp fell 0.4 percent
and food processor Lotte Food Co Ltd declined 0.9
Strength in crude oil prices, which hit their highest in 16
months in the U.S. session, lifted crude oil refiners and
Higher crude oil prices tend to strengthen the pricing of
oil and petrochemical products. Shares in SK Innovation Co Ltd
climbed 3.6 percent and Lotte Chemical Corp
advanced 2.4 percent.
Meanwhile, the market's reaction to Bank of Korea's decision
to keep interest rate steady was muted as it was widely
expected. Governor Kim Choong-soo is due to hold
a news conference from 0220 GMT.
The KOSPI 200 benchmark of core stocks rose 1.9
percent and the junior KOSDAQ traded 1.8 percent higher.
($1 = 1135.7000 Korean won)
(Editing by Jacqueline Wong)