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Seoul: Shares power to 3-week high as shipbuilders rally; won firmer
[SEOUL] South Korean shares rallied more than 1 per cent to its best level in three weeks, buoyed by views the US Federal Reserve will likely wait longer before raising interest rates.
The Korea Composite Stock Price Index (KOSPI) climbed 1.14 per cent to 1,947.54 points as of 0228 GMT, a shade below the intraday peak earlier in the session, which was the highest level for the KOSPI since Oct. 10.
"There are some views that the tapering process could be delayed to run through the rest of this year, but it is more likely that the Fed will maintain its current stance of exercising prudence in consideration of any rate hike," said Lim Dong-rak, an analyst at Hanyang Securities.
The Fed, widely expected to announce an end to its bond-buying stimulus programme at the conclusion of its two-day rate meeting later on Wednesday, has repeatedly stressed it will not rush to raise interest rates in light of easing inflation and slack in the labour market.
Shipyards stole the spotlight as Samsung Heavy Industries soared 7 per cent after announcing, via a regulatory filing, a 288 billion won (US$275.25 million) share buy-back plan.
Daewoo Shipbuilding & Engineering rallied 6.7 per cent while Hyundai Mipo Dockyard jumped 7.7 per cent.
The main bourse made broad gains across the board, with 13 out of the 17 KRX industry sub-indices registered in positive territory, and the number of winning shares outnumbered decliners 476 to 320 as of 0228 GMT.
The performance of blue chip exporters was mixed, as Samsung Electronics rose 1.5 per cent while Hyundai Motor edged 0.3 per cent lower.
The South Korean won was firmer against the dollar on Wednesday, as the market braced itself for dovish comments from the Fed and cut exposure to the greenback.
The local currency was quoted at 1,046.7 to the dollar as of 0228 GMT, compared with Tuesday's session close of 1,049.7.
South Korea's President Park Geun-hye said on Wednesday that the economy was still in crisis despite some signs of improvement and it faces the risk of falling into a long-term slump.
Park's comments were in contrast to the Bank of Korea, where an official said that the country's exports were faring well despite the won's relative strength against currencies of its trading partners.
Central bank data released early on Wednesday before financial markets opened showed South Korea's current account surplus had fallen in September to a 10-month low from August as exports dropped.
December futures on three-year treasury bonds gained 2 basis points to trade at 107.88.