Seoul shares turn higher after GDP; drug firms rise

By Jungyoun Park

SEOUL, Oct 26 (Reuters) - Seoul shares reversed opening losses and turned up as stronger-than-expected gross domestic product data lifted sentiment, and gains in pharmaceutical issues such as Green Cross fuelled rises.

Markets reacted positively to the economic data and foreign buyers helped spur the upward momentum, said Choi Seong-lak, a market analyst at SK Securities.

Foreign investors were buyers of Seoul stocks worth 121.1 billion won, and institutions turned net buyers after 12 consecutive sessions of selling.

'Individual sectors that are positively impacted by related news flow, such as pharmaceuticals due to the U.S. declaration on swine flu, are fuelling gains,' Choi added.

The Bank of Korea said the economy grew a seasonally adjusted 2.9 percent in the third quarter from the second quarter, the fastest in 7-½ years and a third consecutive quarterly gain.

The Korea Composite Stock Price Index (KOSPI) rose 1.23 percent to 1,660.29 points as of 0150 GMT.

Shares in Green Cross jumped 14.73 percent helped by news the U.S. Food and Drug Administration had granted emergency use authorisation for the use of an experimental new drug called peramivir, made by Biocryst Pharmaceuticals Inc and licenced to Shionogi & Co Ltd.

Green Cross has the sole domestic licence to manufacture and distribute peramivir, the company spokesman confirmed.

Other pharmaceutical issues such as Ilyang Pharmaceutical Co Ltd rose 5.21 percent.

Meanwhile, retail issues such as Lotte Shopping Co Ltd rose 2.95 percent helped by positive domestic GDP data amid hopes consumption may be on a recovery track.

Shinsegae Co Ltd, South Korea's No.1 retailer by market value, was up 2.08 percent.

Elsewhere, shares in SK Energy rose 2.56 percent after news South Korea's top crude refiner was chosen as a supplier of lithium-ion batteries for a hybrid electric vehicle project by Daimler unit Mitsubishi Fuso.

'The fact that SK Energy has succeeded in attracting a global automaker for its batteries proves that its auto battery technology is ready for commercial use,' said Lim Ji-soo, an analyst at Shinhan Investment Corp.

But shares in Woori Finance Holdings fell 1.18 percent, underperforming its peers, after a local media report that Korea Deposit Insurance Corp, a majority shareholder of Woori Finance, was considering selling part of its stake in the financial group in a block trade by mid-November.

'Such plans have been known already, but the timing of the block deal has been mentioned in this report, and it has renewed overhang worries,' said Hwang Huhn, an analyst at Woori Investment & Securities.

'Even if the sale is made over a block deal, shares will be sold at a discount,' Hwang added.

(Reporting by Jungyoun Park; Editing by Jacqueline Wong)

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