South Korean stocks rise for second session on tech gains despite Middle East tensions

SEOUL, Sept. 1 (Yonhap) -- South Korean stocks rose for the second consecutive session Tuesday on gains in tech shares despite escalating tensions in the Middle East following a resumption of airstrike exchanges between the United States and Iran. The local currency lost against the U.S. dollar.

The benchmark Korea Composite Stock Price Index (KOSPI) closed at 6,835.80, up 15.78 points, or 0.23 percent.

The index opened 0.52 percent lower, tracking overnight losses on Wall Street, following resumed military clashes between the U.S. and Iran, fueling uncertainty in global oil prices and inflation worries in the world's largest economy.

Federal Reserve Chair Kevin Warsh's hawkish speech at the Jackson Hole Symposium also fanned concerns over a possible rate hike at the upcoming rate-setting meeting later this month.

The Dow Jones Industrial Average fell 0.7 percent and the S&P 500 lost 0.33 percent, while the Nasdaq composite declined 0.12 percent.

However, the KOSPI erased the earlier losses in the afternoon on gains in tech shares after government data showed that South Korea's August exports remained solid, supported by strong chip demand.

Trade volume was light at 263.7 million shares worth 17.5 trillion won (US$12.8 billion). Winners closely outnumbered losers 444 to 421.

Foreign, institution and retail investors were all net sellers, offloading 491.9 billion won, 634 billion won and 539.8 billion won worth of stocks, respectively. Their net selling limited the main index's gains.

"External uncertainty dampened investor sentiment, but strong buying from big companies backed up the index," Lee Kyung-min, an analyst at Daishin Securities, said, referring to large-scale buyback programs recently announced by Samsung Electronics and SK hynix.

Market bellwether Samsung Electronics rose 0.38 percent to 261,000 won, and its chipmaking rival SK hynix advanced 1.14 percent to 1.69 million won.

Oil refineries were strong on rising crude oil prices, as industry leader SK Innovation jumped 7.81 percent to 135,300 won and S-Oil gained 1.07 percent to 151,700 won.

Leading shipbuilder HD Hyundai Heavy Industries increased 0.78 percent to 453,000 won, and major retailer Lotte Shopping vaulted 6.48 percent to 113,300 won.

However, defense giant Hanwha Aerospace fell 3.99 percent to 1.06 million won, and leading pharmaceutical firm Celltrion dropped 0.48 percent to 188,000 won.

The Korean won was quoted at 1,370.4 won against the U.S. dollar, down 1.8 won from the previous stock trading session.

Bond prices, which move inversely to yields, closed lower. The yield on three-year Treasurys rose 4 basis points to 3.878 percent, and the return on the benchmark five-year government bonds added 5.3 basis points to 4.106 percent.