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Seoul: Shares rise on ECB stimulus expectation; won retreats
[SEOUL] South Korean shares rose more than 1 per cent on Tuesday, poised to snap a three-day slide on anticipation of more stimulus from the European Central Bank.
ECB President Mario Draghi said the central bank is ready for further stimulus if its current efforts are not sufficient to accelerate the region's recovery, adding such new measures could include purchases of sovereign bonds.
"Expectations are building that we'll be seeing more easing measures from both Europe and Japan, especially after Japan's negative growth in the third quarter and a stream of dovish comments from Draghi," said Ma Ju-ok, an economist at Kiwoom Securities.
The Korea Composite Stock Price Index (KOSPI) was up 1.14 per cent at 1,965.72 points as of 0155 GMT.
Offshore buyers and institutions underpinned the market, who bought a net 134.6 billion won (US$122.5 million) worth of KOSPI shares combined.
Traditional defensive plays such as consumer staples outperformed the broader market as the KRX Consumer sub-index rallied 4 per cent, the top gainer among 17 KOSPI sub-indices.
Cosmetics giant Amorepacific soared 5.4 per cent while tobacco maker KT&G climbed 3.4 per cent.
The performance of blue chip exporters were mixed, with Samsung Electronics gaining 1.6 per cent while Hyundai Motor drifted 0.3 per cent lower.
The South Korean won retreated against the dollar, as the greenback powered to a fresh four-year peak on anticipation of more stimulus from Europe and Japan, pushing the local currency back towards the 1,100 level where it is seen to have chart support.
The local currency was quoted at 1,098.6 to the dollar as of 0155 GMT, compared with Monday's closing rate of 1,093.9.
December futures on three-year treasury bonds gained 1 basis point to trade at 107.95.