SEOUL, May 27: South Korean shares rose on Monday, hovering close to a seven-week high hit last week, helped by prospects of strong corporate earnings and low valuations, analysts said.
Technology and auto shares were the main gainers, although investors were reluctant to aggressively build positions due to a long weekend in the United States.
The Korea Composite Stock Price Index was up 0.25 percent at 1,978.39 points as of 0146 GMT.
‘South Korea is definitely cheap compared to regional peers, and this is coming to light as corporate earnings are seen steadily improving,’ said Kim Young-june, a market analyst at SK Securities.
South Korea’s 12-month price earnings multiple was 9.4, compared with Taiwan’s 14.5 and Japan’s 15.1, according to Thomson Reuters StarMine data.
‘There are signs investors are now switching positions, taking long position on South Korea and short on Japan,’ said Jun Ji-won, a market analyst at Kiwoom Securities.
South Korea’s key consumer sentiment measure inched up in May to match a near one-year high reached in March, adding to hopes of a sustained recovery for Asia’s fourth-largest economy.
Foreign investors were buyers of a net 4.2 billion won worth of stocks, after two sessions of selling.
LG Electronics rose 2.63 percent and SK Hynix gained 1.1 percent. Hyundai Motor climbed 1.7 percent and Kia Motors advanced 1.4 percent.
But CJ Group-related shares remained under pressure amid an investigation by prosecutors over suspicion of slush funds.
Shares in CJ Corp, a holding company of the food-to-entertainment conglomerate, fell 2.8 percent and CJ Cheiljedang, the group affiliate, was down 3.3 percent.
New orders for shipbuilders lifted their shares.
Daewoo Shipbuilding said on Monday it has won an order worth 896.8 billion won, following another order worth 378 billion won announced late on Friday.
Shares in Daewoo Shipbuilding & Marine Engineering advanced 2.5 percent and Samsung Heavy Industries climbed 1.6 percent.
(agencies)
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