Seoul shares rise 1.97 % on U.S. optimism

South Korean stocks rose 1.97 percent Wednesday as investors were emboldened by growing hope that the U.S. will come up with another stimulus package, analysts said. The local currency gained against the U.S. dollar. The benchmark Korea Composite Stock Price Index (KOSPI) surged 36.29 points to close at 1,880.11, gaining for five sessions running. Trading volume was moderate at 398.9 million shares worth 5.9 trillion won (US$5.5 billion), with gainers outnumbering losers 615 to 232. \"The market is anticipating what will come next in September. The Fed hinted at a third round of quantitative easing at its September meeting. U.S. President Barack Obama\'s Labor Day speech will also matter,\" said Lee Kyung-soo, an analyst at Shinyoung Securities Co. U.S. stock markets ended higher on Tuesday on the release of the Fed\'s August minutes that said the Fed will intervene with aggressive steps to boost the weak economy, overcoming the earlier losses caused by the worse-than-expected consumer confidence for August. Brisk foreign buying powered the KOSPI\'s jump. Offshore investors snapped up a net 290.5 billion won worth of shares, while retail investors offloaded 345.7 billion won. \"But there remains uncertainty in the market. Washington doesn\'t seem to hold enough fiscal measures to boost the slowing economy and the eurozone might face another debt crisis as Italian debt matures next month,\" said Lee. He added that a slowdown in South Korea\'s July industrial output growth limited the gain. Production in the mining and manufacturing sectors expanded 3.8 percent on-year last month from a year earlier, the slowest increase in 10 months. Cars and oil refiners led the rally with top carmaker Hyundai Motor jumping 3.31 percent to 203,000 won and leading refiner SK Innovation rising 2.74 percent to 169,000 won. Market bellwether Samsung Electronics rose 0.27 percent to finish at 744,000 won and its smaller rival LG Electronics soared 4.06 percent to 66,600 won. Financials were also bullish as second-biggest banking group KB Financial Group added 1.85 percent to 44,100 won and No. 1 player Woori Finance Holdings gained 0.42 percent to close at 11,850 won. The local currency closed at 1,066.8 won to the greenback, up 4.8 won from Tuesday\'s close, as overseas investors bought more Korean shares than they sold, dealers said. Bond prices, which move inversely to yields, closed lower. The yield on three-year Treasuries rose 0.01 percentage point to 3.49 percent and the return on the benchmark five-year government bonds added 0.01 percentage point to 3.62 percent