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(LEAD) Seoul shares up 0.3 pct on Japan rate move

All News 16:05 January 29, 2016

(ATTN: ADDS bond yields at bottom)

SEOUL, Jan. 29 (Yonhap) -- South Korean stocks rose 0.3 percent Friday as Japan's interest rate decision relieved investor jitters over a global economic slowdown. The local currency closed higher against the U.S. dollar.

The benchmark Korea Composite Stock Price Index (KOSPI) added 5.12 points to end at 1,912.06, extending its winning streak to a third session. Trade volume was heavy at 379.15 million shares worth 5.97 trillion won (US$4.97 billion), with winners beating losers 518 to 289.

The index opened 0.7 percent lower on heavy foreign sell-offs and losses in tech firms due to downbeat earnings prospects.

But most of the earlier losses were paired, and stocks finally turned around in the last minutes of trading to end with modest gains, after the Bank of Japan (BOJ) unexpectedly adopted negative interest rates to buttress its ailing economy.

"The BOJ's surprise decision was a source of relief for investors who have been leery of global economic circumstances after the global market rout in the new year," said Kim Jung-hyun, an analyst at IBK Securities.

"Japan's easing policy boosted hopes that other major economies, such as Europe, would take similar steps of quantitative easing, as they've pledged. The recovery in global oil prices also whetted their appetite for risky assets," he added.

Individuals picked up a net 205.13 billion won, while overseas investors dumped a net 184.97 billion won and institutions shed a net 87.71 billion won.

Shares of Samsung affiliates fluctuated a lot to wobble the market throughout the session.

Samsung SDS nosedived 15.13 percent to 221,500 won, on news that Samsung Electronics' vice chairman, Lee Jay-yong, would sell a 2.05 percent stake in the conglomerate's key IT unit for around 380 billion won to raise funds to purchase any unsubscribed shares of Samsung Engineering in the planned rights offering.

Samsung Engineering spiked 13.69 percent to 12,650 won, and tech giant Samsung Electronics grew 0.44 percent to 115,000 won.

Chemicals and refiners traded bullish thanks to rising oil prices, supporting the market's upturn.

AmorePacific advanced 2.27 percent to 405,500 won, and S-Oil jumped 2.49 percent to 78,200 won.

But auto shares were among marked decliners, with top automaker Hyundai Motor shedding 1.48 percent to 133,000 won and Kia Motors tumbling 4.75 percent to 45,150 won.

The local currency ended at 1,199.1 won against the greenback, up 9.4 won from Thursday's close.

Bond prices, which move inversely to yields, closed higher. The yield on three-year Treasurys shed 5.4 basis points to 1.564 percent while the return on the benchmark five-year government bonds lost 5.6 basis points to 1.700 percent.


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