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Seoul shares hit 6-month highs; Summers news, automakers support
September 16, 2013 / 1:52 AM / in 4 years

Seoul shares hit 6-month highs; Summers news, automakers support

(Updates to midday)

* Summers’ exit from Fed chairman race buoys risk appetite

* Hyundai Motor, Kia Motors rise as yen extends rise

* Hyundai Steel gains after brokerage raises price target on new blast furnace

* Celltrion skids by daily limit of 15 pct

SEOUL, Sept 16 (Reuters) - South Korean shares rose to 6-month-highs on Monday morning, as risk-appetite got a boost after Lawrence Summers dropped out of the race to become the Federal Reserve’s next chairman, while a firmer Japanese yen drove automakers higher.

Summers is perceived by markets as relatively hawkish and his decision could leave Janet Yellen, a well known policy dove, as front runner for the top job.

“The withdrawal of Summers is positive news to investors, as it removes uncertainty about the Fed policy,” said Oh Hyun-seok, chief market strategist at Samsung Securities.

Summers’ surprise decision comes ahead of this week’s crucial Fed meeting to decide on when and by how much to reduce its massive-bond buying stimulus.

The Korea Composite Stock Price Index (KOSPI) was up 1 percent at 2,013.72 points as of 0126 GMT after earlier touching 2,018.02 points, its highest level since March 7.

Foreign investors extended their buying streak after capping 16 consecutive sessions of net purchases on Friday.

Automakers advanced as the Japanese yen was up against the dollar for the third straight day. South Korea’s top automaker Hyundai Motor rallied 3 percent to a nearly 15-month-high, while affiliate Kia Motors climbed 2.7 percent.

A firmer yen reduces the price competitiveness of Japanese automakers which compete head-on with Korean companies in overseas markets.

Steelmakers also attracted buyers, with bellwether POSCO up 1.4 percent and second-ranked Hyundai Steel soaring 5 percent. Shinhan Investment Corp lifted the target price of Hyundai Steel on Monday, saying the operation of its third blast furnace would help raise its sales and profit.

Hyundai Heavy Industries led gains by shipbuilders, climbing 3.7 percent.

Bio-pharmaceutical firm Celltrion bucked the trend, tumbling by the daily limit of 15 percent after media reports that financial regulators had met on Friday to discuss allegations of unfair share trade by its chief executive.

A Celltrion spokesman said it had not been briefed on the result of the meeting. (Reporting by Hyunjoo Jin; Editing by Shri Navaratnam)

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