SEOUL (Thomson Financial) - South Korean shares are expected to open higher
on Tuesday, with investors encouraged by Wall Street's overnight rally amid
easing concerns about the credit market.
The Dow Jones industrial average jumped nearly 190 points after JPMorgan
Chase & Co boosted investor optimism by lifting its offer for Bear Stearns to 10
US dollars per share from 2 dollars, a move aimed at soothing Bear Stearns
shareholders upset over JPMorgan's earlier offer.
The housing sector also gave investors an unexpected boost after the
National Association of Realtors said sales of existing homes rose by 2.9
percent in February to a seasonally adjusted annual rate of 5.03 million units,
the biggest increase in a year.
"It seems investors increasingly believe that the worst is past in the
global credit woes, with the recent rally that sustained for five days in a row
as good evidence," said Kang Hyun-Cheol, a Woori Investment & Securities
analyst.
Foreign investors led the rebound on the local stock market by purchasing
shares worth about 580 billion won over the past five sessions, a notable break
from their months-long exit.
"The market may see a strong run-up in the second quarter, with easing
global credit risk expected to spark a liquidity-driven rally," he said.
The KOSPI index closed up 9.61 points or 0.6 percent at 1,655.30 on Monday.
The benchmark index has now gained more than 80 points since last Tuesday,
recouping all the heavy losses caused by the problems at Bear Stearns.
Institutions were net buyers of 22.6 billion won in shares and foreign
investors were net buyers of shares worth 43.6 billion won. Retail investors
were net sellers of 99.1 billion won in shares.
The yield on the three-year state bond closed up 0.11 percentage points at
5.29 percent and the yield on the three-year corporate bond ended up 0.10
percentage points at 6.18 percent.
(1 US dollar = 997.2 won)
eunkyung.seo@thomson.com
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