SEOUL: South Korean stocks closed 0.67 percent higher on Tuesday on hopes that a proposed supplementary budget and a possible interest rate cut may help shield the local economy from external shocks such as a potential Greek default, analysts said. The local currency gained ground against the U.S. dollar.
After a choppy session, the benchmark Korea Composite Stock Price Index (KOSPI) rose 13.71 points to 2,074.2. Trading volume was moderate at 387.32 million shares worth 5.6 trillion won (US$5.02 billion), with gainers beating decliners 553 to 266.
The rebound from the largest fall in a month on Monday was helped by expectations that Asia’s fourth-largest economy will stay firm against external risks on the back of the proposed extra budget estimated at more than 10 trillion won and a possible additional rate reduction.
“Investors are well aware that the government has been monitoring outside risks and making efforts to take appropriate measures to prop up the country’s growth, including the central bank’s rate cut and the government’s supplementary budget plans,” said Kim Hyung-ryeol, an analyst at Kyobo Securities Co.
In addition, the ongoing concerns over debt-mired Greece have had a relatively minor influence on the local stock market since it was not a problem that came suddenly or unexpectedly.
“Concerns of a Greek default have been around since several months before, so that did not come as a surprise to investors,” Kim added.
