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Wednesday September 19, 7:15 AMSeoul shares to gain on U.S. rate cut; FTSE eyedSEOUL, Sept 19 (Reuters) - Seoul shares could gain on Wednesday, led by exporters such as Hyundai Motor after U.S. interest rates were cut by 50 basis points, easing worries about the outlook for South Korea's second-biggest export market.Financials such as Woori Financial Group could also gain after U.S. investment bank Lehman Brothers Inc said overnight earnings fell less than expected and added the worst of a recent credit correction was over. [ID:nN18426958] But broader gains may be eventually capped as the South Korean won could strengthen following the rate decision, potentially denting profits earned abroad at exporters, while oil prices surged to a peak at over $82 a barrel. "We are going to see a relief rally today," said Choo Hee-yeop, deputy general manager of asset management strategy at Korea Investment and Securities. "The Fed's decision is going to significantly ease concerns that a U.S. economic slowdown would have an impact on exports," he added. Wall Street rallied overnight after the Federal Reserve slashed the U.S. benchmark federal funds rate in a bold bid to shield the world's biggest economy from a housing slump and financial turbulence. [ID:nN18433941] Exporters such as Hyundai Motor Co and Samsung Electronics Co Ltd that depend on the United States for a significant portion of their sales could lead gainers. Analysts said some of the buying could also be sparked by rising speculation that index compiler FTSE will raise South Korea to developed market status from the current advanced emerging market designation. The move could trigger a rally due to expectations for increased foreign buying from funds tracking FTSE indexes. The decision from the index compiler is due out on Thursday. STOCKS TO WATCH - Korea Electric Power Corp The power monopoly said on Tuesday it was seeking to acquire stakes in Russian utilities as part of its efforts to expand its global business, but no details were given. [ID:nSEO7094] - LG Card Trading in shares of South Korea's biggest card issuer will be suspended for an indefinite period starting on Wednesday ahead of a share swap with its top shareholder Shinhan Financial Group's . - Daishin Securities Co The brokerage said on Tuesday net profit in August dropped 39.6 percent to 12.2 billion won ($13.11 million) from a year earlier, marking a 69.9 percent slump from July. PREVIOUS CLOSE The benchmark Korea Composite Stock Price Index (KOSPI) fell 1.8 percent to 1,838.61 points. The December KOSPI 200 futures index dropped 4.7 points to 233.60, while the underlying KOSPI 200 spot index fell 4.3 points to 232.42. The junior and tech-heavy Kosdaq market fell 1.2 percent to finish at 775.45. The Dow Jones industrial average rose 2.5 percent to 13,739.39, while the tech-heavy Nasdaq composite advanced 2.7 percent to end at 2,651.66. |
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