SEOUL, Mar 25: South Korean shares rose on Monday after Cyprus and the European Union agreed on a deal to finance a bailout for the country, with local institutions snapping up shares on improved risk appetite.
The benchmark Korea Composite Stock Price Index (KOSPI) closed up 1.5 percent at 1,977.67 points, rebounding from last week’s five-week low.
‘The market gained due to improved sentiment from the Cyprus deal after recent declines, although the bulk of Italian and Spanish bonds maturing in April could again increase European risks in the short term,’ said Kang Hyun-gie, an analyst at IM Investment & Securities.
On Monday, Cyprus clinched a last-ditch deal with international lenders to shut down its second largest bank and inflict heavy losses on uninsured depositors in return for a 10 billion euro ($13 billion) bailout.
The KOSPI had fallen 1.9 percent over the week to Friday, dragged by foreign sell-offs as concerns over Cyprus and a cyberattack on local broadcasters and banks hurt sentiment.
Most blue-chips were up, with heavyweight Samsung Electronics jumping 2.8 percent after losing ground for three straight sessions.
Hyundai Motor also gained 0.5 percent, supporting the index. Samsung and Hyundai Motor together account for 21.1 percent of the KOSPI’s market capitalisation.
However, investors offloaded some defensives such as utilities and food processors. Korea Electric Power Corp fell 1.7 percent, while CJ Cheiljedang dropped 0.9 percent.
Local institutional investors purchased a net 153.7 billion won ($137.31 million) worth of KOSPI shares, lifting the index. Advancing shares outnumbered decliners 544 to 266.
The KOSPI 200 benchmark of core stocks was up 1.7 percent, while the junior KOSDAQ edged 0.3 percent lower.
(agencies)
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