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South Korean shares rose on Thursday, as a rally on Wall Street bolstered blue chips such as Samsung Electronics, while some investors hunted for bargains after prices tumbled a day earlier.

KT&G Corp, the country's biggest cigarette maker, added 0.84 percent to 41,800 won after reporting its net profit in the July-September quarter rose 28 percent to 173.8 billion won from a year earlier.

"The strong gains in the US markets have cleared away some of the recent uneasiness i0n global markets," said Kim Seong-ki, chief investment officer at Chohung Investment Trust Management.

The benchmark Korea Composite Stock Price Index rose 0.79 percent to end at 1,162.23. The index posted its biggest one day-percentage fall in over six months on Wednesday.

Foreign investors extended their selling spree to a 20th consecutive session, matching a 20-day selling streak in March, making some analysts cautious about whether the market can hold on to gains chalked up over the past few months. The main index hit an all-time high on October 5.

"It's a concern, and with the won getting weaker and US rates set to continue rising, it's likely foreign investors will continue selling," said Lee Woo-hyun, an analyst at Kyobo Securities.

A weaker South Korean won usually erodes capital gains when translated into other currencies.

Foreign investors, who account for over 40 percent of the KOSPI's total value and a fifth of average daily trading value, sold some 143.3 billion won ($136 million) worth on Thursday, data at 0640 GMT showed. That brought their combined net sales total over the past 20 sessions to 2.88 trillion won, compared with the 2.1 trillion won they sold in March.

Positive earnings helped Wall Street rally on Wednesday, pushing the S&P 500 to its largest points gain in almost six months.

Among the day's gainers, Woori Investment and Securities Co rose 0.39 percent to 13,000 won. South Korea's biggest brokerage in terms of market share said after the market's close its net profit in the latest quarter rose more than five-fold from a year ago.

POSCO Co Ltd, the world's fifth-biggest steel maker, gained 3.91 percent to 212,500 won, while state-run power provider Korea Electric Power Corp advanced 2.25 percent to 34,150 won.

Copyright Reuters, 2005


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