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South Korean shares rebounded on Tuesday after falling in the previous session as foreign investors resumed buying local shares amid weak demand for safe havens, analysts said.
The benchmark Korea Composite Stock Price Index (KOSPI) rose 15. 24 points, or 0.79 percent, to close at 1,955.79. Trading volume stood at 464.11 million shares worth 6.58 trillion won (5.85 billion U.S. dollars).
After fluctuating in and out of positive terrain, the KOSPI ended bullish as offshore investors rushed to buy local stocks through program-linked transactions for the last 10 minutes of trading.
"The key index turned into negative terrain as local institutions sold stocks in a bid to lock in profits, but the index rebounded later in the trading as foreigners bought massive stocks via program-linked transactions," Kwak Joong-bo, an analyst at Samsung Securities in Seoul, told Xinhua.
Kwak noted that appetite for risky assets recently dominated the market, forecasting that foreigners will likely shore up local stocks for the time being unless Europe woes are made for the worse significantly.
After staying as net sellers during the trading, overseas investors shifted to net buyers for the last 10 minutes of trading. They bought a net 134 billion won worth of local stocks through program-linked transactions which posted net buying worth 507.5 billion won.
Institutional and retail investors, however, were net sellers. Local institutions sold a net 33.9 billion won worth of shares, with net selling by retail investors reaching 32.2 billion won.
Although the KOSPI ended higher on foreign buying, concerns over Europe's debt crisis remained. Greek officials finished last weekend without a deal with private-sector creditors, and investors will be looking this week for the parties to finally reach an agreement. Without such a deal, Greece will jeopardize its access to bailout funds, and might not be able to make a 14- billion-euro debt payment due March 20.
Shipbuilders led the market rebound. Daewoo Shipbuilding & Marine Engineering, the world's No. 2 shipyard, surged 6.5 percent to close at 27,850 won on news that it has clinched 560 million U.S. dollars of deal to build five vessels from Kuwait Oil Tanker. The world's largest shipbuilder Hyundai Heavy Industries jumped 4.01 percent to 311,500 won, and its smaller rival Samsung Heavy Industries soared 5.15 percent to 35,700 won.
Large-cap shares also gained ground. Top automaker Hyundai Motor added 2.31 percent to 221,000 won, and its affiliate Kia Motors rose 1.5 percent to 67,500 won. Leading chemical firm LG Chem gained over 2 percent, and memory chip giant Hynix Semiconductor rose 2.29 percent to 26,850 won.
In contrast, banking shares lost ground. The nation's No. 4 banking group by assets Hana Financial Group dropped 2.78 percent to 38,400 won, and the country's fifth-largest lender Korea Exchange Bank (KEB) fell 1.13 percent to 7,910 won.
Market bellwether Samsung Electronics tumbled over 2 percent during the trading, but it pared its initial losses on foreign buying to close at 1,107,000 won, down 0.72 percent against Monday' s close. Hyundai Mobis, the nation's biggest auto parts maker, dipped 1.07 percent to 277,000 won as foreign investors offloaded the shares, and the country's No. 3 crude oil refiner S-Oil was down 0.81 percent to 122,000 won.
The local currency closed at 1,123.3 won against the greenback, up 4.0 won from Monday's close.
Bond prices ended lower. The yield on the liquid three-year treasury notes rose 0.02 percentage point to 3.38 percent, and the return on the benchmark five-year government bonds added 0.01 percentage point to 3.49 percent.
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