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UPDATE 1-S.Korea's record Oct exports, strong industry index, cheer growth outlook

Thursday, 31 Oct 2013 | 8:48 PM ET

outlook@ (Combines separate Oct data; adds comments from economists, govt official)

* S.Korea Oct exports +7.3 pct y/y vs +3.9 pct poll

* S.Korea Oct HSBC/Markit PMI s/adj 50.2; 5-mth high

* Robust Oct data lifts Q4 growth outlook - analysts

SEOUL, Nov 1 (Reuters) - South Korea's exports last month handily beat expectations to set a record and a private survey showed the manufacturing sector expanded for the first time in five months -- brightening prospects for sustained growth in Asia's fourth-largest economy.

The Ministry of Trade, Industry and Energy said on Friday that export shipments grew 7.3 percent from a year earlier to $50.5 billion, the largest monthly sum on record.

This was also better than a median forecast for 3.9 percent growth tipped by a Reuters survey of economists, with forecasts ranging from 0.4 percent growth to 8.0 percent growth.

The HSBC/Markit purchasing managers' index (PMI) for South Korea's manufacturing sector, released separately on Friday, showed that activity for the sector expanded in October for the first time in five months as the sub-index for exporters reached a 31-month high.

Taken together, the latest figures should bolster expectations that South Korea's economic recovery will continue in the current quarter as external demand improves. The central bank said last week that sequential third-quarter economic growth stood at a seasonally adjusted 1.1 percent, matching growth in the second quarter.

"This shows that Korea remains on track for a gradual recovery as it heads towards year-end, especially with orders picking up on the external front," HSBC economist Ronald Man said in a statement. "But there is still scope for demand from China to rise further, which would provide a further boost to Korean shipments."

The Seoul stock market's main KOSPI rose 0.4 percent by 0026 GMT, outperforming the regional market's slight decline measured by the MSCI Asia excluding Japan index, which dipped 0.1 percent. Technology shares led gains in Seoul.

On the other hand, October's consumer inflation eased to the slowest annual rate in more than 14 years as prices of food prices fell sharply from a year earlier. The finance ministry attributed the weak price pressures to unusually high food prices in 2012 because of bad weather and expects annual inflation at 1 percent or higher in November and December.

Data released by Kookmin Bank earlier on Friday showed housing prices across South Korea rose 0.20 percent in October from the previous month, suggesting stabilisation in the ailing property market.

(Reporting by Se Young Lee; Editing by Choonsik Yoo and Eric Meijer)

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