June 14 (Bloomberg) -- South Korean stocks jumped the most in 11 months after U.S. retail sales rose and the Federal Reserve said growth isn't stoking inflation, damping speculation interest rates will be increased in the world's biggest economy. LG.Philips LCD Co. and Hyundai Motor Co. led exporters higher.
``As concerns recede a bit people can see what's really happening, which is that economies are still strong,'' said Kim Young Il, who oversees about $1.1 billion as chief investment officer at Hanwha Investment Trust Management Co. in Seoul. ``There will be rate increases but only enough to control, rather than cut off economic momentum. It's OK to buy stocks.''
The Kospi index surged 47.19, or 2.7 percent, to close at 1769.18 in Seoul. That's the biggest gain since July 20, 2006 and the largest fluctuation among markets included in global indexes. The Kosdaq climbed 2.3 percent to 783.02. Kospi 200 futures expiring in June climbed 2.1 percent to 223.00, while the underlying index rose 2.7 percent to 224.46.
Today was so-called triple witching, when equity and index options, and index futures contracts expire. Stock markets are often volatile on the expiration day because of a pickup in program trading, which refers to financial institutions' purchases and sales of more than 15 stocks at a time.
The Kospi extended its advance by about 13 points in the last minute of trading as program trading surged, Korea Exchange data shows.
U.S. Economy
LG.Philips, the world's second-largest maker of liquid- crystal displays, added 2,100 won, or 4.9 percent, to 45,000. Hyundai Motor, South Korea's biggest automaker, climbed 1,900 won, or 2.6 percent, to 74,000. North America accounted for about a fifth of Hyundai's sales in the five months through May.
Retail sales in the U.S. grew 1.4 percent in May, more than double the gain forecast by economists in a Bloomberg News survey, and the Fed yesterday said economic expansion hasn't increased ``overall'' pressures on wages and prices. The U.S. is South Korea's second-largest export market, after China.
Kia Motors Corp., which gets more than 70 percent of its sales from abroad, rose 100 won, or 0.7 percent, to 13,550. Samsung Electronics Co., South Korea's biggest exporter, advanced 8,000 won, or 1.4 percent, to 581,000.
Separately, improving conditions in the chip market will drive Samsung's share price higher after the second quarter, BNP Paribas Securities Korea Co. said in a report.
LG Electronics Inc., South Korea's second-largest handset maker, rose 3,100 won, or 4.1 percent, to 79,000. Daiwa Securities SMBC Co. raised its six-month price estimate by 16 percent to 86,000, in a note. The brokerage cited the company's mobile-phone business, which is ``quickly turning around in both volume and profitability.''
Samsung Techwin
Companies tied to the local economy gained on speculation growth will pick up.
``Conditions for employment will continue to improve this year,'' said Vice Finance Minister Chin Dong Soo. ``The number of people employed in June will increase as the impact of the economic recovery becomes more evident.''
Lotte Shopping Co., South Korea's largest department store chain, added 8,000 won, or 2.1 percent, to 386,000. Shinsegae Co., which runs the biggest discount-store chain, climbed 28,000 won, or 4.5 percent, to 650,000.
About 576 million shares valued at 8.5 trillion won ($9.1 billion) changed hands on the Korea stock exchange, 76 percent more than the three-month daily average of 4.8 trillion won.
The following shares also rose or fell. Stock symbols are in brackets after company names.
Samsung Electro-Mechanics Co. (009150 KS), an electronics- parts maker, gained 1,900 won, or 3.9 percent, to 51,000. Korea Investment & Securities Co. lifted its six-month price estimate by 13 percent to 54,000 won, in a report. The company's display- parts businesses will turn to profit in the third quarter and drive next year's earnings growth, wrote Greg Roh, an analyst.
Samsung Techwin Co. (012450 KS), a maker of digital-imaging products, lost 100 won, or 0.2 percent, to 54,800. HSBC Holdings Plc cut its recommendation to ``underweight,'' from ``overweight,'' in a report, citing recent price gains. The price estimate was raised 26 percent to 55,000 won ``with no upside,'' wrote Nam Park, a Hong Kong-based analyst.
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