SKorean shares outlook - Higher on Wall Street's rally after Fed cuts rates

SKorean shares outlook - Higher on Wall Street's rally after Fed cuts rates

	Published : Thu, 01 Nov 2007 00:29 By : Agencies Print this Story

SEOUL (Thomson Financial) - South Korean shares are expected to open higher on Thursday with investors likely to cheer Wall Street's rally following the modest rate cut by the Fed.

The Dow rose 1 percent after the Fed cut its benchmark rate by 25 basis points to 4.50 percent as expected, which followed a bold rate cut in September.

Investors initially unnerved by signals of no further rate cuts in the near future turned to see a more positive side and believe that the US economy is strong enough to wade through the credit crunch and housing market slump without additional help from the central bank.

'The Fed cut rates as expected and Wall Street's response was cheerful, which should provide an additional catalyst to the stock market,' Shinyoung Securities analyst Kim Se-Jung said.

Kim said the US central bank focused on stabilizing the housing market rather than on inflationary jitters.

'The rally will likely continue up to 2,300-2,500 points sooner or later with some intermittent corrections,' Kim said.

Investors will also look to a raft of economic and corporate results due out today. South Korea's CPI and exports data for October will be released while local carmakers will announce their latest monthly sales performance.

The KOSPI closed up 12.48 points or 0.6 percent at 2,064.85 on Wednesday, surpassing the previous closing record of 2,062.92 set on Monday. The benchmark index traded between 2,043.93 and 2,065.53.

Institutions and retail investors were net buyers of shares worth 94.6 billion won and 23.2 billion won each while foreign investors were net sellers of 198.6 billion won in shares.

The yield on the three-year state bond closed at 5.43 percent and the yield on the three-year corporate bond was 6.02 percent, both up 0.02 percentage points.

(1 US dollar = 900.7 won)

eunkyung.seo@thomson.com

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