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South Korean Stocks Hit 2 Year High

Korean stocks end at a two year high while Japan's stock market closes lower for the second week in a row.

Seoul stocks continued their winning streak Friday with the Kospi index adding more than 1-percent to close at 895. That pushed its gains to almost 30-percent for the year, making it one of the world's top performers for 2002. One factor behind the market's rally was a report that South Korea's information technology industry is expected to grow by more than 19-percent this year.

Samsung Electronics, the biggest computer-memory-chip maker, added 2.6 percent and Hynix Semiconductor, the third largest, rallied 7.8 percent. SK Telecom, the country's top cell phone operator, gained one percent on optimism for higher sales.

Analysts say the steel sector is one to watch in both Seoul and Tokyo in the coming days. The United States on Wednesday unilaterally imposed tariffs of up to thirty-percent on imported steel for three years to protect the ailing U.S. steel industry from cheaper imports from South Korea, China, Japan and other countries.

Ron Bevacqua is an economist at Commerz Securities in Tokyo. He predicts that steel stocks could be volatile in the near term but that the broader effect on Japan's and other Asian economies will be limited. "With the U.S. having restrictions on imports on steel, that will probably hurt the steel industry to some degree and that will be negative for people in that sector, but since it is such a small part of the overall Japanese economy, the macroeconomic impact is pretty small," he says.

Japan's benchmark Nikkei Average shed 1.6 percent Friday to close at 11,345. It has lost nearly 5 percent in the last 10 trading sessions. Analysts say investors are selling on skepticism over the government's determination to revive the country's slumping economy.

Bank stocks fell hard, with Mizuho Holdings, the world's largest bank by assets, dropping 4.5 percent. Its rival, Sumitomo Mitsui, fell more than 6 percent.

Taiwan stocks put in a strong performance Friday, with the Weighted Price Index gaining 1.6 percent to 6,140 in heavy trading. Tech stocks, plastics and textiles all ended higher on brighter business expectations.