April 2, 2009 / 1:45 AM / 11 years ago

Seoul shares hit 5-½ mth high;North news ignored

 * KOSPI rises 2 pct
 * Investors calm despite North Korea rocket fueling report
 * Memory chip issues rise on improving outlook
 (Updates to mid-morning)
 By Jungyoun Park
 SEOUL, April 2 (Reuters) - Seoul shares rose on Thursday after gains on Wall Street on U.S. data that pointed to a moderating economic downturn, with investors shrugging off reports North Korea had begun fueling a long-range rocket.
 The Korea Composite Stock Price Index .KS11 was up 2.02 percent at 1,258.18 as of 0104 GMT, rising for a third consecutive session and hitting its highest intraday level since October 16.
 "Sentiment has improved on expectations that a liquidity rally is near on the latest monetary easing by global central banks. Also the latest batch of domestic and U.S. economic indicators show the real effects of aggressive economic stimulus measures are taking shape," said Lee Kyoung-su, a market analyst at Taurus Investment & Securities.
 Reports showed the contraction in U.S. factory activity slowed in March, and U.S. construction spending fell at a slower-than-expected rate in February. [ID:nN01407201]
 Meanwhile investors largely ignored news that North Korea had begun fueling a long-range rocket it plans to launch between April 4-8, starting a process that experts say means the rocket will be ready for lift-off in three to four days. [ID:nSEO72388]
 "Yes, the North will probably launch the missile, and that certainly can't be good. But markets will probably bounce back after a couple days as they always do...market participants have learned over time to remain calm to North Korea-related developments," Lee added.
 Gains were led by technology issues including memory chip makers Hynix Semiconductor (000660.KS) and Samsung Electronics (005930.KS).
 "It is only a matter of time before the DRAM contract prices rise in April and May," said Jay Kim, an analyst at Hyundai Securities in a note on Thursday.
 "[Memory chip] demand will gradually rise in the second half of this year, and share price gains are only reflecting that," Kim said, raising the target price on Hynix to 16,000 won from the previous 13,000 won.
 Samsung Elec was up 1.58 percent and Hynix jumped 4.9 percent to 12,900 won.
 Banks also continued rising on the back of easing sectoral worries, and on the won currency's KRW= continued stabilisation.
 KB Financial Group (105560.KS) advanced 3.77 percent and Shinhan Financial Group (055550.KS) climbed 4.08 percent.
 North Korea-sensitive issues gained despite the rocket fueling reports. Romanson (026040.KQ), a watchmaker with production cites in Kaesong industrial park, was up 4.04 percent.
 Shipbuilders also outperformed on the back of the latest economic data. Daewoo Shipbuilding & Marine Engineering (042660.KS) was up 4.23 percent and STX Shipbuilding 067250.KS advanced 6.37 percent.
 (Editing by Jonathan Hopfner)     

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