Seoul the darling of investors in Asia

Ray Heath12 April 2012

SURPRISINGLY strong economic growth in

South Korea's

With no overnight leads from Wall Street, and Tokyo closed for its own Thanksgiving holiday, fund managers turned to Seoul, continuing the blossoming love affair that has boosted the Kospi index by more than 25% this year.

Oil-related stocks around the region gained on expectations of higher oil prices, following expected output cuts by Norway, planned discussions on output between Russian officials and oil executives, and the overnight rise of US$1.17 to $19.90 a barrel which put pressure on airline stocks.

South Korea's gross domestic product grew by 1.8% in the third quarter, a sharp contrast to performances of other countries in the region that have slipped into recession. The Kospi added 3% to its gain this year, rising 19.76 points to 639.32, despite some warnings that the domestically-driven growth was bound to run out of steam.

GDP grew despite a fall of 19% in exports. Economists warn that the slowing trend in sales of technology products overseas will eventually drag down the economy. Buyers ignored this and moved in on stocks linked to the local economy. Banks, stockbrokers, power providers and telecom counters were all in demand from overseas institutions.

China oil companies quoted in Hong Kong rose, CNOOC setting the pace with a gain of nearly 3%. Mainland telecom stocks also improved after China Unicom issued forecasts of strong growth, and the Hang Seng index advanced 64.4 points to 11,317.7. HSBC Holdings rose for the fourth day in succession, adding 50 cents to HK$94.75.

Heavy buying of Taiwan stocks by governmentsponsored funds boosted electronics stocks, and took the Weighted Average index up 67.9 points to 4517.92. The pump-priming countered weakening sentiment after figures showed unemployment at a 10-year high of 5.2% as GDP fell 4.5% in the third quarter, marking the country's first recession since 1974.

Australian resource stocks also benefited from the rise in oil prices and recovered from recent weakness sparked by the rejection by WMC of Alcoa ' s approach. Woodside Petroleum led with a 3% rise, and BHP Billiton advanced 1.5%, which helped to lift the All Ordinaries index 70.5 points to 3332.9.

A forecast of a bright Christmas, and an improved earningspershare estimated from stores chain Woolworth, sent the stock up by more than 2%.

Singapore's Straits Times index struggled into the black in late trade after early falls on news that local shipbuilding-based conglomerate Keppel Corporation had called off merger talks with Sembcorp group. Keppel shares tumbled almost 5%, but stronger technology stocks took the index up 8 points to 1459.2. Malaysia bounced back after yesterday's shutdown, the Kuala Lumpur Composite index adding 6.37 points to 639.28.

Thailand stocks notched up a seventh consecutive day of gains, the SET index up 2.04 points to 295.18, and Indonesia's Jakarta Composite rallied after two days of falls, climbing 2.1 points to 382.94.

Prices and indices in this section are supplied from various sources and calculated at different times and may not always match those listed on the site.

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