S Korean shares rise on Obama's re-election

South Korean shares rose for two straight sessions on Wednesday as U.S. President Barack Obama's re-election erased policy uncertainties, boosting market sentiment. The benchmark Korea Composite Stock Price Index (KOSPI) rose 9. 38 points, or 0.49 percent, to close at 1,937.55. Trading volume stood at 550.29 million shares worth 4.58 trillion won (4.22 billion U.S. dollars). The KOSPI stayed in negative terrain earlier in the trading, but the index turned north to close up following the news that Obama won the re-election in the U.S. presidential race. Market watchers said that Obama's success in winning a second- term secured political certainty in the U.S., noting that expectations for the continuous U.S. economic policy will help the local stock market stabilized for the time being. Experts, however, cautioned that the positive impact from the election result will not last for long, saying that uncertainties remained over the European debt problems and the possible U.S. fiscal cliff. It has been widely believed that whoever is elected will have to deal with the fiscal cliff. Democrats and Republicans were expected to get down to the business of arriving at a budget agreement that will avert an automatic increase in taxes and spending cuts that could be imposed at the start of 2013. Foreigners kept their buying streak for two straight sessions by purchasing a net 122.9 billion won worth of local stocks. Retail and institutional investors sold shares worth 109.6 billion won and 14.4 billion won, with program-linked transactions posting a net selling worth 109.5 billion won. Auto shares led the market gain, recovering from the recent losses caused by the fuel efficiency scandal in the U.S. The U.S. Environmental Protection Agency said last week that Hyundai and Kia overstated the fuel mileage of around 900,000 vehicles sold in the country since 2011. Following this announcement, Hyundai and Kia said in a statement that they will compensate the affected U.S. and Canada customers for the losses stemming from the difference between the stated and actual fuel efficiencies. Top automaker Hyundai Motor advanced 2.2 percent to 212,500 won, and its affiliate Kia Motors climbed 2.8 percent to 58,800 won. Other large-cap shares ended mixed. Market bellwether Samsung Electronics gained 1 percent to 1,362,000 won, and flat screen maker LG Display added 3 percent to 36,150 won. But, electric power provider Korea Electric Power Corp. declined 3 percent to 27, 350 won. The local currency finished at 1,085.4 won against the greenback, up 5.3 won from Tuesday's close. Bond prices ended unchanged. The yield on the liquid three-year treasury notes finished steady at 2.78 percent, and the return on the benchmark five-year government bonds closed flat at 2.85 percent.