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Monday August 20, 7:10 AMSeoul shares may surge on exporters, financialsSEOUL, Aug 20 (Reuters) - Seoul shares could surge on Monday after the Federal Reserve cut a key U.S. lending rate, with exporters such as Samsung Electronics seen among the leading gainers on eased fears about the global economic outlook.Financials such as Kookmin Bank could also benefit from expectations the move by the U.S. central bank will calm global credit markets and reduce the concerns about funds' exposure to the U.S. subprime mortgage sector. The Fed's action comes after the benchmark KOSPI suffered its worst week since mid-September 2001, having dropped 10.4 percent last week amid a tumble in global markets. "Global markets are likely to stabilise after a turbulent period. The Fed's move is now setting up expectations for a cut in U.S. interest rates as well, although it is not yet certain whether the Fed will take this action," said Kim Hak-kyun, an analyst at Korea Investment and Securities. Wall Street surged on Friday, sending New York-traded shares of South Korean firms such as steel maker POSCO and Shinhan Financial Group sharply higher. The KOSPI is likely to follow suit, having dropped 18.7 percent since hitting a record 2,015.48 points on July 26. Exporters such as Samsung Electronics Co. Ltd. are likely to benefit, raising hopes that the increased availability of credit will keep global economic growth intact. Among domestic factors on Monday, the opposition Grand National Party will declare its primary winner for December's presidential race, which opinion polls show they are almost sure to win. [ID:nSEO203328] Also over the weekend, the two Koreas agreed to postpone until Oct. 2-4 the summit they had planned to hold this month because of the flooding in the North. [ID:nSP81405] Affiliates of the Hyundai Group, such as Hyundai Merchant Marine , had surged earlier this month on news of an inter-Korea summit, as the conglomerate is heavily involved in tourism and other projects in North Korea. STOCKS TO WATCH - Kia Motors Corp. Union workers at South Korea's second-biggest auto maker voted to accept a wage package that includes a 5.2 percent rise in basic salary and a higher bonus, the union and the company said on Friday, ending their summer wage wrangle. [ID:nSEO224120] Separately, Kia plans to sell 200 billion won ($210.5 million) in domestic bonds, according to the Korea Securities Dealers Association, in the latest emerging market issuer scared off a foreign offering by global credit fears. [ID:nSEO196561] - Hyundai Motor Co. The country's biggest auto maker said on Sunday it plans to raise vehicle kit exports to Russia by 60 percent next year in a bid to expand its market presence in the fast-rising car market. [ID:nSEO187071] - Korea Investment Holdings The financial services provider said on Friday net profit in July nearly quadrupled to 35.3 billion won from 9.4 billion won a year earlier, though that marked a 42.7 percent drop from June. PREVIOUS CLOSE The benchmark Korea Composite Stock Price Index (KOSPI) lost 3.19 percent to end at 1,638.07 points, its lowest close since May 21. The September KOSPI 200 futures index fell 8.00 points to 207.50, while the underlying KOSPI 200 spot index declined 7.10 points to 208.57. The junior and tech-heavy Kosdaq market fell 2.26 percent to finish at 673.48. The Dow Jones industrial average rose 1.82 percent to 13,079.08, while the tech-heavy Nasdaq composite gained 2.2 percent to end at 2,505.03. |
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