January 2, 2013 / 11:36 PM / 5 years ago

Seoul shares seen buoyed by U.S. fiscal deal; autos lag

SEOUL, Jan 3 (Reuters) - Seoul shares are likely to climb
further on Thursday following a global stocks rally when U.S.
legislators struck a deal to halt a round of automatic fiscal
tightening that threatened the world economy.
    "The index is seen continuing to rally this week, following
U.S. equities, which got a bigger-than-expected bounce," said
Lee Seon-yeob, an analyst at Shinhan Investment.
    While the United States avoided the 'cliff', the world's
largest economy still faces bruising budget battles over cutting
the deficit and raising the debt ceiling in two month's time.
 
    Lee said automakers will continue to suffer as the won
strengthens while the Japanese yen weakens, eroding the
overseas price competitiveness of South Korean cars. 
     The won jumped to a 16-month high against the dollar
on Wednesday and prompted the finance minister to warn that the
government may intervene to "curb one-way bets" against it.
 
     The Korea Composite Stock Price Index (KOSPI) 
closed up 1.7 percent on Wednesday, the biggest daily percentage
gain since mid-September, at 2,031.10 points. 
    
------------------MARKET SNAPSHOT @ 22:28 GMT-------------------
 
INSTRUMENT     LAST     PCT CHG     NET CHG
S&P 500               1,462.42       2.54%      36.230
USD/JPY                  87.29      -0.06%      -0.050
10-YR US TSY YLD    1.835        --         0.079
SPOT GOLD            $1,685.49      -0.05%      -0.860
US CRUDE                $93.12       1.42%       1.300
DOW JONES             13412.55       2.35%      308.41
ASIA ADRS              136.04       2.70%        3.58
-------------------------------------------------------------
>WallSt starts a year with a bang after 'cliff'deal 
>Budget deal pushes benchmark yields to 3-month high 
>Dollar falls vs high-yielding currencies;yen sinks 
>Oil rises on US fiscal deal,hits highest since Oct 
    
---STOCKS TO WATCH---  
    
    **DAEWOO ENGINEERING & CONSTRUCTION **
    Daewoo Engineering said late on Wednesday that Kele Saudi
Arabia Limited cancelled a 356 billion won ($334.74
million)order.
    The contract, signed in November 2011, was  for construction
service at the Salman Bay housing project.
    
    **CHINA GAOXIAN FIBRE FABRIC HOLDINGS 
 **
    China Gaoxian Fibre Fabric Holdings said in a regulatory
filing on Wednesday that it may request an extension from
Singapore Exchange to work out a deal to sell a controlling
stake to Fleur Capital Pte. Ltd.
    The proposed deal is worth $27 million.

    **KOREA ELECTRIC POWER CORP (KEPCO) **
    State-owned utility KEPCO rose 3.6 percent on Wednesday to 
a 2-year high price of 31,550 Korean won ($29.67) after broker
Daishin Securities raised its target price from 36,000 won to
41,000 won, citing the likelihood that the incoming
administration will raise electricity fees which will lead to
better earnings.
    A second nuclear reactor run by a KEPCO subsidiary, which
was shut down to replace parts supplied with forged quality
documents, was restarted late on Wednesday.    



($1 = 1063.5000 Korean won)

 (Reporting By Somang Yang; Editing by Eric Meijer)

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