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Seoul shares rise on foreign demand, auto shares rebound
February 19, 2013 / 2:41 AM / in 5 years

Seoul shares rise on foreign demand, auto shares rebound

* New BOJ governor in focus as market eyes direction of yen

* Hyundai Motor, Kia Motors rebound

* Technology shares, shipbuilders gain

SEOUL, Feb 19 (Reuters) - South Korean stocks crept up after trading narrowly on Tuesday morning, led by automakers, with foreign investors stepping up buying.

The market is focusing on the appointment of Japan’s next central bank governor to gauge direction on the yen, which has been declining in recent months and hurting the prospects of South Korean firms.

The Korea Composite Stock Price Index (KOSPI) ticked 0.3 percent higher to 1,987.52 points as of 0233 GMT.

“We expect the next BOJ governor to have an aggressive monetary policy after the G20 failed to put a brake on the yen’s fall,” said Jeon Jong-kyu, an analyst at Samsung Securities.

“The weak yen and poor earnings have been already priced in the KOSPI, which has lagged behind its overseas peers this year,” he said.

Japan will decide candidates for Bank of Japan’s new governor and deputy governors after Prime Minister Shinzo Abe returns from his Feb. 21-24 U.S. trip.

A weaker yen raises the price competitiveness of Japanese exporters and poses a disadvantage to South Korean rivals in overseas markets.

South Korean automakers rebounded from losses the previous session, with Hyundai Motor up 1 percent and Kia Motors gaining 1.9 percent.

Technology stocks also gained ground, with heavyweight Samsung Electronics inching up 0.1 percent and LG Electronics gaining 1.2 percent.

Shipbuilders extended gains on recovery hopes, with Daewoo Shipbuilding and Marine Engineering firming 3 percent and Hyundai Heavy Industries gaining 1.4 percent.

“There is a perception that the sector’s earnings have bottomed out in the fourth quarter... But the market will not improve significantly from last year, limiting upside potential,” said Lee Ji-hoon, an analyst at SK Securities. (Reporting by Hyunjoo Jin; Editing by Jacqueline Wong)

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