Seoul: Shares rally to one-month high, won up ahead of Fed meeting

[SEOUL] Seoul shares rallied on Wednesday morning before the US Federal Reserve's two-day monetary policy meeting starts later in the global day.

The meeting could settle mattters for a while by deciding to raise interest rates for the first time in almost a decade.

The Korea Composite Stock Price Index (KOSPI) was up 1.8 per cent at 1,973.14 points as of 0216 GMT. It touched as high as 1,973.47, the strongest intraday level since Aug 18. Winners outnumbered losers by 33 to 10. "Whether the Fed to hike rates or not, it will contribute to easing the uncertainty over markets, which will bolster the market today," said Seo Myung-chan, an analyst at Kiwoom Securities.

Meanwhile, Standard & Poor's raised South Korea's sovereign currency rating to AA-minus from A-plus late on Tuesday.

Seo mentioned the upgrade also helped sentiment improve in the stock market.

Foreigners bought a net 114.7 billion won (S$136.1 million) of shares in the main board. If the purchase holds until the market close it would break a 29-consecutive-session selling streak.

Market heavyweight Samsung Electronics Co Ltd gained 2.3 per cent, and market bellwether Hyundai Motor Co Ltd climbed 3.8 per cent.

Samsung Heavy Industries Co Ltd and Samsung Engineering Co Ltd jumped 7.9 per cent and 11.5 per cent, respectively, on expectations they could merger following comments from Samsung Heavy Industries Chief Executive Park Dae-young.

On the currency market, the South Korean won opened higher, mirroring a prevalence of risk appetite in Wall Street, and kept its gains as China shares were in positive territory.

The won was up 0.5 per cent at 1,180.5 per dollar. It touched a morning high of 1,177.5 just after the open.

Jung Kyung-parl, a foreign exchange analyst at KEB Futures, said currency market participants were focused on Shanghai shares, a fall in which would weigh on the won.

September futures on three-year treasury bonds were down 0.07 points at 109.47.

REUTERS