Wednesday, October 14, 2009
* KOSPI rebounds after two losing sessions
* Second day of foreign buying fuels upward momentum
* POSCO rises ahead of results announcement
By Jungyoun Park
SEOUL, Oct 14 - Seoul shares rose on Wednesday, lifted by foreign buying with POSCO <005490.KS> gaining ahead of its quarterly results announcement, while gains in key technology issues such as Samsung Electronics <005930.KS> also helped.
But concerns that the economy and corporate earnings may pick up slower than expected limited markets' gains, according to Lawrence Kim, a market analyst at Woori Investment & Securities.
'Shares are making a modest recovery after their latest losses, but rises are limited as markets are grappling with the possibility that economies may be recovering slower than hoped,' Kim said.
As of 0145 GMT, the Korea Composite Stock Price Index <.KS11> was up 0.98 percent at 1,644.92 points.
Foreign investors were buyers of a net 135 billion won worth of stocks, picking up shares for a second session.
POSCO rose 2.83 percent ahead of its quarterly results as the world's No.4 steelmaker is widely expected to post solid numbers for the third quarter, helped by lower raw material prices and a pickup in demand.
'Earnings had been expected to come out healthy, but with its earnings announcement falling on the day, steam is gathering around POSCO shares,' said Shin Yoon-shik, an analyst at Meritz Securities.
'POSCO's earnings will continue to improve in the fourth quarter, helped by the strength in the won <KRW=>,' Shin added.
LG Chem <051910.KS> advanced nearly 3 percent after the company said late on Tuesday its third quarter net profit hit 543 billion won , up from the previous year's 297 billion won. [ID:nSEL002680]
'The increase in operating profit is attributable to China's strong petrochemical demand, an increase in IT battery orders...and an increase in liquid crystal display demand,' Nomura said in a note dated October 13.
Shares in Hankook Tire <000240.KS> rose 2.07 percent after Merrill Lynch raised its target price on the tyre maker to 31,000 won from 28,000 won, citing its earnings growth outlook in China.
'Hankook Tire is benefiting from a solid recovery in the domestic replacement tire market along with Korean auto companies' rapidly rising utilisation rate,' Merrill Lynch said in a note on Wednesday.
'Its overseas affiliates, especially China, are contributing sizeable profits.'
Technology issues' gains also boosted markets, with Samsung Electronics <005930.KS>, the largest share on the main KOSPI, climbing 1.59 percent and Hynix Semiconductor <000660.KS> rising 1.94 percent.
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