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Korea's KOSPI ends up but Kosdaq OTC shares falter

SEOUL: South Korea's benchmark index closed up slightly on Tuesday as most blue chips made gains despite net selling by foreign investors, analysts said.

The Korea Composite Stock Price Index (KOSPI) closed up 4.70 points or 0.56 percent at 850.02.

Blue chip stocks, which led Monday's steep drop, rose as institutional and individual investors targeted these shares, analysts said.

SK Telecom, the biggest mobile service provider, closed up 222,000 won or 5.43 percent at 4.31 million.

Fixed-line and Internet service provider Dacom added 2.89 percent to end at 391,000.

Samsung Electronics, the world's largest memory chip maker, was up 2,500 won to 256,000.

Analysts said a newspaper report that Samsung Electronics recorded a 600 billion to 700 billion won in profit in January on sales of 2.88 trillion won contributed to the rise.

State-run Korea Telecom was up 3.15 percent to 114,500.

"Increasingly, traditional industrial titles are undervalued and getting ignored. Things are at a point where only a sharp drop like yesterday's can pull in investors to push the index forward," said Kim Jang-hwan, a market strategist at Seoul Securities.

The technology-laced the Kosdaq over-the-counter market closed down 1.56 points or 0.60 percent at 257.80.

Internet-related shares led the slide.

Wellink Corp, a telecommunications equipment maker, shed 11.98 percent to 242,500 won.

Jacetec, a computer component maker, lost 7.58 percent to 390,000.

Handysoft, a software developer, shed 7.03 percent to 688,000.

Analysts said small caps rallied.

"Buying interest is spreading across the Kosdaq. More investors are now eyeing small and medium-sized stocks," said Lee Young-mok, a Kosdaq analyst at Daewoo Securities.

Bucking the trend, Internet website developer Locus was limit up, adding 21,500 won to end at 201,500.

On the main exchange, institutional investors bought a net 88.9 billion won worth of shares, led by investment trust companies separately buying a net 14.8 billion won.

Individual investors bought a net 38.5 billion won worth of shares.

Foreign investors were sellers, unloading a net 114.1 billion won worth.

Analysts said foreign investors turned heavy sellers as the local currency weakened against the U.S. dollar.

They said foreigners also migrated to the Kosdaq OTC market.

A weaker won against the dollar makes it more costly for foreign investors to hold local stocks, they said.

"Unless there's a clear sign that the stock price will continue to rise, foreign investors are going to sell. That's why they are moving funds into the Kosdaq where gains are more prominent," said Lee at Daewoo Securities.

Trade volume totalled 242.44 million shares, compared to Monday's total of 213.79 million.

Trade was valued at 2.92 trillion won compared to 2.64 trillion won on Monday.

Decliners outpaced advancing issues 455 to 375 with 64 shares unchanged.

March futures on the KOSPI 200 0 KS: closed up 0.55 point at 107.9, while the underlying spot index ended up 0.70 point at 107.15.

Analysts said they expect the market to see little change or slip on Wednesday as investors target leading Internet-related Kosdaq stocks that fell today.-Reuters