Seoul shares trade 1.21 pct higher in late morning

SEOUL, May 7 (Yonhap) -- South Korean stocks traded 1.21 percent higher late
Thursday morning 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 benchmark Korea Composite Stock Price Index (KOSPI) gained 16.85 points to
1,410.30 as of 11:20 a.m.
"The Seoul bourse maintained upward momentum as concerns about the outcome of a
stress test on the 19 largest U.S. banks somewhat ebbed," said Rhoo Yong-seok, an
analyst at Hyundai Securities Co. "Gains in bank shares stood out in early
trading on the back of earnings optimism and growing prospects for potential
takeovers in the sector."
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.
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 by
the daily limit of 15 percent 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 more than 11 percent after a South Korean court said Wednesday that
auditors favored the survival of the troubled carmaker over its liquidation.
The local currency was trading at 1,260.60 won to the U.S. dollar as of 11:20
a.m., up 16.4 won from Wednesday's close.
sooyeon@yna.co.kr
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