S Korean shares gain on hopes for stimulus in Europe, US

South Korean shares gained for three straight sessions on Monday as hopes mounted that central banks in Europe and the United States would soon step in to bolster their economies. The benchmark Korea Composite Stock Price Index (KOSPI) advanced 14.63 points, or 0.8 percent, to close at 1,843.79. Trading volume stood at 333.5 million shares worth 3.83 trillion won (3.37 billion U.S. dollars). The KOSPI started higher, and stayed in positive terrain throughout the session amid mounting expectations that the U.S. Federal Reserve and the European Central Bank (ECB) would soon unveil another stimulus measure to help their fragile economy. "The local stock market maintained its relief rally that came after ECB President Mario Draghi's comments that the ECB would do whatever it takes," Jeong Seung-jae, an analyst at Mirae Asset Securities in Seoul, told Xinhua. Jeong, however, noted that the upward momentum weakened later in the trading as there has been no action taken by the central banks until now, saying that the KOSPI would not rise further until their real actions are taken. The US central bank officials will meet on Tuesday and Wednesday for their regular policy meeting, while the ECB policymakers will get together on Thursday for the August rate- setting meeting. The US Fed was forecast to wait until the September meeting for more action as it may want to accumulate additional information on the economic conditions, but the ECB was expected to resume its government bond purchases in an attempt to bring down borrowing costs for Spain and Italy. Draghi will meet with head of the German central bank in coming days to discuss the potential for bond purchases, interest rate cuts and long-term loans to banks. Foreigners led the recent rally by purchasing local stocks for two straight sessions. Offshore investors bought a net 477.1 billion won worth of local shares, but institutional investors sold a net 38 billion won worth of stocks. Retail investors dumped shares worth 439.4 billion won. Foreign buying mostly concentrated on tech and auto shares. Market bellwether Samsung Electronics advanced 3.41 percent to 1, 275,000 won, and memory chip giant SK Hynix rose 0.71 percent to 21,300 won. The country's biggest auto parts maker Hyundai Mobis jumped 4 percent to 299,000 won, and top automaker Hyundai Motor was up 1.8 percent to 232,500 won. Among large-cap shares, gainers outnumbered losers. Top crude oil refiner SK Innovation rose 1.7 percent to 152,500 won, and the country's No. 2 banking group KB Financial Group climbed 2.5 percent to 35,350 won. The world's largest shipbuilder Hyundai Heavy Industries inched up 0.2 percent to 227,000 won. Meanwhile, top steelmaker POSCO fell 0.3 percent to 357,500 won, and the nation's No. 2 carmaker Kia Motors declined 0.5 percent to 76,000 won. Leading chemical firm LG Chem retreated 0.8 percent to 307,000 won. The local currency finished at 1,137.6 won against the greenback, up 0.7 won from Friday's close. Bond prices ended higher. The yield on the liquid three-year treasury notes lost 0.01 percentage point to 2.85 percent, and the return on the benchmark five-year government bonds fell 0.01 percentage point to 2.96 percent. (1 U.S. dollar equals 1,134.5 won)