Seoul stocks surge 1.85 pct on U.S. bank rescue plan

(ATTN: ADDS bond yields at bottom)
SEOUL, March 24 (Yonhap) -- South Korean stocks closed up 1.85 percent Tuesday as
investors bought financials and builders following overnight rallies in U.S.
markets. The local currency rose against the U.S. dollar.
The benchmark Korea Composite Stock Price Index (KOSPI) rose 22.2 points to
1,221.7. Volume was heavy at 505.3 million shares worth 5.8 trillion won (US$4.2
billion), with gainers outpacing losers 521 to 287.
"Investors seemed to have been comforted by the U.S. government's plan to
purchase bad assets from struggling banks, prompting purchases in financial
issues here," said Lee Seung-woo, an analyst at Daewoo Securities.
On Monday, the U.S. government announced detailed plans to spend as much as $1
trillion to purchase toxic assets from banks. The Dow Jones industrial average
jumped 6.84 percent amid sharp gains in banking issues and the tech-heavy Nasdaq
rose 6.76 percent.
Foreigners drove the market higher here, buying more shares than they sold for a
sixth consecutive day. Their net purchase amounted to 362 billion won on Tuesday.
Major lenders gained marked ground. KB Financial Group jumped 4.63 percent to
35,050 won, while Woori Financial Group gained 2.41 percent to 7,650 won.
Builders ended higher on expectations that the government's 28.9 trillion won
extra budget will bolster demand for construction. Leading builder Daewoo
Engineering & Construction jumped 2.06 percent to 9,900 won.
Steel and machinery shares added to the upward momentum. Top steelmaker POSCO
advanced 3.25 percent to 381,000 won and No. 1 power equipment manufacturer
Doosan Heavy Industries & Construction jumped 6.42 percent to 69,600 won.
Tech shares remained mixed, with No. 2 player LG Electronics surging 3.6 percent
to 92,100 won. Telecom shares, however, closed weaker with fixed-line telephony
giant KT inching down 0.13 percent to 39,300 won.
The local currency finished at 1,383.5 won against the U.S. dollar, up 8.1 won
from Monday's close, as foreign investors' purchase of local shares increased
demand for the local currency.
Bond prices, which move inversely to yields, closed sharply lower. The return on
three-year Treasuries rose 0.09 percentage point to 3.64 percent and the
benchmark yield on five-year government bonds gained 0.15 percentage point to
4.43 percent.
kokobj@yna.co.kr
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