Seoul shares rebound on US results, banks down on rate probe

http://articles.economictimes.indiatimes.com/2012-07-19/news/32747490_1_seoul-shares-rate-probe-woori-finance-holdings

SEOUL: Seoul shares rebounded on Thursday from losses the previous session, tracking an overnight Wall Street rally as solid U.S. corporate earnings lifted the S&P 500 index to a two-and-a-half month high.

The Korea Composite Stock Price Index ( KOSPI) was up 1.66 percent at 1,824.63 points as of 0240 GMT. Dampening the rebound, though, were sharp falls for shares of Korean banks being probed by authorities investigating how a key interest rate has been set.

The overall market got a boost after the S&P 500 hit its highest level since early May, helped by quarterly numbers from bellwethers such as Intel Corp and Honeywell and better-than-expected U.S. housing starts.

Seoul's broad market rally lifted 17 of the 19 industry group sub-indices tracked by the main bourse operator Korea Exchange. But analysts remained cautious on whether the rally can be sustained as concerns about growth persist.

"There is a dearth of fundamental cues to make any solid bets on," said Lee Woo-jin, an analyst at Woori Investment & Securities.

Investors looking for fresh signs of further easing by the U.S. Federal Reserve were left wanting, after Chairman Ben Bernanke repeated the central bank's pledge to act if the economy needed it, but remained tight-lipped over any specific measures.

Index-giant Samsung Electronics soared 3.6 percent while SK Hynix rose 1.2 percent.

Shares in South Korea's top four banks bucked broader market trend to post steep falls on Thursday after being investigated by the Fair Trade Commission (FTC), the local anti-trust agency, as part of a widening probe into suspected collusion in fixing certificate of deposit rates.

Hana Financial slumped 3.5 percent while Woori Finance Holdings tumbled 4.1 percent. Shinhan Financial and KB Financial each declined more than 2.5 percent.