Seoul shares end 0.70 pct higher on bargain hunting

(ATTN: ADDS more info in 4-5 paras; ADDS bond yields at bottom)
SEOUL, Jan. 8 (Yonhap) -- South Korean stocks closed 0.34 percent higher Friday
as investors went bargain hunting after a day of massive sell-offs, analysts
said. The local currency rose against the U.S. dollar.
The benchmark Korea Composite Stock Price Index (KOSPI) gained 5.46 points to
1,695.26. Volume was moderate at 371.4 million shares worth 6.79 trillion won
(US$5.99 billion) with gainers outpacing losers 414 to 355.
"Both buyers and sellers are being cautious as the KOSPI index wanders around the
1,700 point barrier," said Cho Jae-hoon, an analyst at Daewoo Securities Co. "The
Seoul bourse stayed in narrow trading, sandwiched between institutional selling
and program buying."
The Bank of Korea (BOK) froze its key rate at a record low of 2 percent for the
11th straight month. BOK Gov. Lee Seong-tae indicated the central bank will keep
its accommodative policy stance for the time being to support the country's
nascent economic recovery.
The stock market was unfazed by the BOK decision, as it was widely expected,
analysts said.
While foreign and retail investors bought shares worth 40 billion won and 37
billion won, respectively, sell-offs by institutional investors prevented the
KOSPI from rising further.
Market bellwether Samsung Electronics rose 0.98 percent to close at 821,000 won.
Shipbuilders and construction shares led the overall gains. Hyundai Heavy
Industries, the world's No. 1 shipyard, climbed 2.58 percent to 199,000 won and
top domestic builder Daewoo Engineering & Construction rose 1.95 percent to
13,100 won.
Bank shares also gained ground. KB Financial Group, which controls top lender
Kookmin Bank, rose 0.17 percent to 57,900 won. Korea Exchange Bank went up 0.79
percent to end at 14,450 won.
The local currency ended at 1,130.50 won against the greenback, up 4.90 won from
Thursday's close, as offshore investors increased their holdings of the local
currency, dealers said.
Bond prices, which move inversely to yields, closed lower. The yield on the
benchmark three-year Treasury note rose 0.04 percentage point to 4.36 percent,
and the return on five-year government bonds added 0.07 percentage point to 4.91
percent.
ygkim@yna.co.kr
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