S. Korean stocks inch up on economic stimulus

SEOUL, Dec. 16 (Yonhap) -- South Korean shares managed to add 0.29 percent Tuesday, as retail investors bet that a government stimulus plan will pick up the slowing economy, analysts said. The local currency gained against the U.S. dollar.
Bucking early losses, the benchmark Korea Composite Stock Price Index (KOSPI)
climbed 3.37 points to close at 1,161.56. Volume was heavy at 618.36 million
shares worth 6.71 trillion won (US$4.96 billion), with gainers outpacing losers
511 to 351.
"A buying spree by retail investors helped slash early losses. They purchased
local shares on hopes that large-scale construction projects will stimulate the
sluggish economy," said Yoo Seung-min, an analyst at Samsung Securities.
The South Korean government unveiled a plan on Monday to spend 14 trillion
(US$10.29 billion) over the next four years on improving and redeveloping four
local rivers in an effort to buffer an economic slowdown.
Wall Street tumbled Monday after a pyramid fraud weighed down on financial
issues. Former chairman of the Nasdaq Stock Market Bernard Madoff was arrested on
Thursday for orchestrating an alleged $50 billion scheme to swindle investors,
including leading banks the world over.
The Dow Jones industrial average shed 0.75 percent and the tech-heavy Nasdaq
composite index plunged 2.10 percent.
Automakers were the biggest boost to the index, with Hyundai Motor adding 5.56
percent to 47,500 won. Its affiliate Kia Motors rose 13.59 percent to end at
8,190 won.
Financial shares also finished higher a day after Morgan Stanley raised their
credit ratings. Woori Finance Holdings jumped 4.75 percent to 7,500 won and KB
Financial Group surged 3.48 percent to 34,150 won. State-run Industrial Bank of
Korea added 5.11 percent to 8,850 won.
Retailers added to the overall gain. Shinsegae, a leading retailer, rose 2.63
percent to 468,500 won and Hyundai Department Store added 3.44 percent to 63,100
won.
IT shares, however, ended sharply lower as the global economy is forecast to
remain weak down the road. Market bellwether Samsung Electronics shed 3.18
percent to 457,000 won and its smaller rival LG Electronics fell 2.26 percent to
82,100 won.
The local currency ended at 1,349.55 won to the dollar, up 17.45 won from
Monday's close, as the U.S. Federal Reserve is predicted to slash key interest
rate close to zero on Tuesday, analysts said.
pbr@yna.co.kr
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