Seoul shares end 0.35 pct higher despite naval clash

(ATTN: ADDS bond yields at bottom)
By Kim Soo-yeon
SEOUL, Nov. 10 (Yonhap) -- South Korean stocks closed 0.35 percent higher Tuesday
as investors brushed off an inter-Korean naval skirmish along the western sea
border, analysts said. The local currency inched down against the U.S. dollar.
The benchmark Korea Composite Stock Price Index (KOSPI) rose 5.51 points to
1,582.3. Volume was moderate at 271.7 million shares worth 3.8 trillion won
(US$3.28 billion), but losers outnumbered gainers 432 to 351.
"The key index started higher, but it cut earlier gains after investor sentiment
was dented by the news that the navies of the two Koreas exchanged fire off the
west coast," said Kwak Joong-bo, an analyst at Hana Daetoo Securities Co. "But
the effect of the incident remained short-lived on the market."
The KOSPI got off to a brisk start on the back of overnight rallies in U.S.
markets, rising as much as 1.5 percent at one point. But the upward momentum was
trimmed on reports on the inter-Korean naval clash. No South Korean casualties
were reported while North Korea appears to have suffered "considerable" damage,
according to government officials.
But analysts said the impact of the incident was limited as investors were
accustomed to issues related to geopolitical risk.
Financial shares gained ground, mirroring rises in their peers in U.S. markets.
Top financial services company KB Financial Group advanced 0.51 percent to 59,300
won and its rival Hana Financial Group climbed 3.15 percent to 36,000 won.
Top automaker Hyundai Motor gained 2.44 percent to 105,000 won while its
affiliate Kia Motors declined 0.28 percent to 18,000 won.
Shipbuilders traded in negative territory. Top shipyard Hyundai Heavy Industries
fell 0.6 percent to 164,500 won and its rival Daewoo Shipbuilding & Marine
Engineering unloaded 1.56 percent to 15,750 won.
The local currency ended at 1,162.2 won against the greenback, down 1.2 won from
Monday's close, as offshore investors snapped up the greenback, dealers said. The
won touched an intraday high of 1,155.2 per the dollar at one point, but it
reversed course after the news of the naval clash broke, they added.
Bond prices, which move inversely to yields, closed higher. The return on
three-year Treasuries declined 0.02 percentage point to 4.47 percent and the
benchmark yield on five-year government bonds lost 0.05 percentage point to 4.95
percent.
sooyeon@yna.co.kr
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