Seoul shares gain as risk appetite recovers with Cyprus deal

Seoul shares gain as risk appetite recovers with Cyprus deal

SEOUL - South Korean shares rose on Monday after Cyprus and the European Union agreed a deal to finance a rescue of the country, lifting risk appetite after the main index closed last week at a five-week low.

The benchmark Korea Composite Stock Price Index (KOSPI) gained 1.4 per cent at 1,976.48 points as of 0301 GMT.

"A bailout proposal for Cyprus somewhat allayed concerns that came to the fore last week, while the won's rise against the dollar decreased the outlook for a further rise by the won,"said Han Beom-ho, an analyst at Shinhan Investment Corp.

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 (S$16.2 billion) bailout.

The South Korean won rose early on Monday, in line with other Asian assets and the euro after the news of the Cyprus bailout deal.

Most blue-chips were up, with heavyweight Samsung Electronics jumping 2.3 per cent after losing ground for three straight sessions.

Hyundai Motor also gained 0.9 per cent near mid-session, bolstering the index. Samsung and Hyundai Motor together account for 21.1 per cent of the KOSPI's market capitalisation.

However, investors offloaded some defensives such as utilities and food processors. Korea Electric Power Corp fell 1.7 per cent, while snack maker Orion Corp dropped 1.2 per cent.

Local institutional investors purchased a net 114.8 billion Korean won ($102.56 million) worth of KOSPI shares near mid-session, lifting the index.

Advancing shares outnumbered decliners 532 to 246. The KOSPI 200 benchmark of core stocks was up 1.6 per cent, while the junior KOSDAQ edged 0.3 per cent lower.

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