ASIA MARKETS: South Korea Stocks Surge, Leading Asian Market Gains

Samsung boosts index; Nikkei nears 21-year high

South Korean equities led broad gains across the Asia-Pacific region on Tuesday, as investors there caught up with the global market strength following a long holiday.

South Korea's benchmark Kospi was up 2% in early trade and approaching the index's record high, after local markets were shut for all of last week and Monday. Driving gains was a 4.4% surge in heavyweight Samsung Electronics (005930.SE) , as traders rush to buy the stock ahead of the company's third-quarter earnings report due on Friday.

If the stock maintains those gains through Tuesday's close, it would be Samsung's best daily percentage gain in about a year.

Despite a likely earnings decline for its display and mobile business, strong pricing for Samsung's memory chips will likely help the company report another stellar quarter, said Daiwa Capital Markets analyst S.K. Kim.

"Solid earnings momentum is likely to continue in 2018," said Kim.

However, continued geopolitical tensions hurt travel-related stocks, with Lotte Tour (032350.SE) off 2.2% and Korean Air Lines (003490.SE) declining 1.8%.

"There is still this nagging issue of North Korea," said Joanne Goh, a regional equity strategist for DBS in Singapore. In terms of fundamentals, this is a significant risk for South Korean markets, she said.

In Japan, the Nikkei Stock Average gained 0.3% to 20,771.41 following Monday's market holiday, led by auto makers. The index is closing in on a 21-year high: A move above the 20,952.71 level touched in late June 2015 would mark its highest since 1996.

Mitsubishi Motors (7211.TO) was up 1.9%, while Toyota Motors (7203.TO) added 1.5%.

But Japanese energy stocks were sold off as they caught up with the end-of-week slide in oil prices in the U.S. Japan Petroleum (1662.TO) was off 2.5%, with Inpex Corp. (1605.TO) down 1.4%.

Elsewhere in the region, Australia's S&P ASX/200 was flat, while New Zealand's NZX 50 was up 0.4%, on track to reach yet another record close. Singapore's Straits Times Index was down 0.3%, while the Taiwan market was shut for a holiday.

Hong Kong's Hang Seng Index was trading flat after pulling back from a 10-year high on Monday, while the Shanghai benchmark index was off 0.3%.

Car maker Geely (0175.HK) was down 0.4% in Hong Kong despite record September sales, while heavyweight Tencent (0700.HK) was up 0.9%. Macau stocks remained under pressure and Chinese property developers stabilized after Monday's slide.

Despite the early weakness in China shares, investors in the region expect the Chinese government to help prop up local markets ahead of the crucial Communist Party Congress next week, said Vishnu Varathan, a senior economist at Mizuho Bank.

(END) Dow Jones Newswires

October 09, 2017 23:15 ET (03:15 GMT)