Seoul shares end 0.55 pct higher on U.S. bank optimism

SEOUL, May 7 (Yonhap) -- South Korean stocks closed 0.55 percent higher Thursday
after swinging in and out of positive terrain as investors took comfort from Wall
Street gains on eased fears over the results of a stress test on U.S. banks,
analysts said.

The local currency rose against the U.S. dollar.
The benchmark Korea Composite Stock Price Index (KOSPI) advanced 7.63 points to
1,401.08, the highest level since the beginning of this year. Volume was heavy at
758.9 million shares worth 9.39 trillion won (US$7.44 billion), with gainers
outpacing losers 474 to 340.
"The Seoul bourse gained ground on eased concerns about the health of the U.S.
banking system, but it trimmed earlier gains later as institutional investors
took profits," said Lee Sun-yup, an analyst at Goodmorning Shinhan Securities Co.
"Gains in the Korean currency dealt a blow to exporters on concerns over their
price competitiveness."
U.S. stocks closed higher Wednesday as leaked results of stress tests on the U.S.
banks showed that many do not need as much capital as previously expected. The
Dow Jones industrial average gained 1.21 percent and the tech-laden Nasdaq
composite index inched up 0.28 percent.
The U.S. government plans to release the outcome of the tests on Thursday (local
time) that should reveal how much capital U.S. lenders will need to raise to
weather a severe economic downturn.
The KOSPI rose by as high as 1.58 percent at one point, but the index cut earlier
gains in late trading as institutional investors engaged in profit-taking,
analysts said.
Bank shares traded in positive territory, mirroring gains in their U.S. rivals.
Korea Exchange Bank, controlled by U.S. buyout fund Lone Star Funds, jumped 11.18
percent to 8,450 won after the state-run Korea Development Bank expressed an
interest in buying the bank.
Ssangyong Motor, which entered court receivership in February under mounting
debt, climbed 11.91 percent to 2,020 won after a South Korean court said
Wednesday that auditors favored the survival of the troubled carmaker over its
liquidation.
But gains in the Korean currency dented exporters. Chip giant Hynix Semiconductor
declined 4.75 percent to 14,050 won and top automaker Hyundai Motor shed 3.48
percent to 66,500 won.
The local currency ended at 1,262.3 won against the U.S. dollar, up 14.7 won from
Wednesday's close, after the central bank said that the country's foreign
exchange reserves rose by the largest monthly amount over three years in April to
$212.48 billion, dealers said.
sooyeon@yna.co.kr
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