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Seoul shares rise as foreign buying accelerates

Reuters - Friday, November 28

*KOSPI rises 1.2 pct as foreigners remain net buyers

*Tech, auto exporters gain on positive export data

*Industrials sink on China economic worries

By Park Jung-youn

SEOUL, Nov 28 - Seoul shares gained on Friday led by tech and auto exporters after the government forecast a current account surplus for 2009, but shipbuilders retreated after a think-tank warned of slower growth in the crucial China market.

The Korea Composite Stock Price Index <.KS11> finished up 1.18 percent at 1,076.07 points, rising for a fourth consecutive session and and making its total gains since Monday 11 percent.

"The latest positive news flows on global governments' moves to prop up economies and financial markets continued to help. But was driven more by hope than real signs of improvements in the real economy," said Cho Byung-hyun, a market analyst at Tong Yang Securities.

"The main index will continue to move in volatile trade around the 1,100 to 1,200-level. Eyes will be on foreign exchange markets," Cho added.

The index last traded above 1,100 on Nov. 17 and stood at 914 points a week ago as aftershocks from the global financial market meltdown continue to whip Seoul shares.

Foreign investors scooped up a net 271 billion won worth of shares, remaining net buyers for three consecutive sessions for the first time since late October.

But the index ended off the high of 1,084.03 as weak factory output data confirmed existing concerns about an economic slowdown, according to Kim Joong-hyun, a market analyst at Goodmorning Shinhan Securities.

South Korea's industrial output fell a seasonally adjusted 2.3 percent in October from September, data showed on Friday, widely missing market expectations.[ID:nSEO132645]

But a positive export outlook helped boost some technology and auto issues, lifting Hynix Semiconductor <000660.KS> 6.62 percent and Kia Motors <000270.KS> 8.02 percent.

South Korea's Finance Ministry said on Friday that the country's current account was expected to swing into a surplus next year from a projected 2008 deficit.[ID:nSEO302088]

Shares in shipbuilders retreated, with analysts attributing the falls to a forecast from a government think-tank in China on Thursday that the country's annual gross domestic product growth would slow to 8.0 percent this quarter from 9.0 percent in the third quarter due to weaker exports and a slump in the property market.[ID:nSHA1723]

Hyundai Heavy Industries <009540.KS> fell 4.05 percent and POSCO <005490.KS> lost 1.16 percent.

Shares in units of C&Group, a construction and engineering conglomerate, tumbled after two core units on Thursday said they would ask their creditors to lead debt restructuring programmes, becoming the latest casualties of the country's liquidity crunch.

C&Heavy Industries <008400.KS> ended down 14.97 percent and C&Woobang Construction <013200.KS> plunged 15 percent.

However builders, which had suffered on talk about C&Group's financial troubles, made a comeback on hopes restructuring would lift some of the uncertainty surrounding the sector.

Hyundai Engineering & Construction <000720.KS> rose 2.45 percent and Daewoo Engineering & Construction <047040.KS> advanced 3.8 percent.

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