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Seoul: Stocks rebound on technical support; won firmer on dovish Fed
[Seoul] South Korean shares edged higher on Tuesday morning, on track to snap a three-day losing streak as bargain hunters locked in on recently pummelled stocks.
The Korea Composite Stock Price Index (KOSPI) was up 0.2 per cent at 1,931.50 as of 0125 GMT, hovering just above a new seven-month closing low on Monday.
"If past momentum cycles are any indication, the KOSPI definitely looks to be in oversold territory from a technical perspective, with an important support level seen near 1,900 points," said Kim Do-hyun, an analyst at Samsung Securities.
The KOSPI's gains were limited as a broad risk-off sentiment drove foreign investors out of the market for an eighth straight session, during which they have net sold more than 1.6 trillion won (US$1.51 billion) in local equities, exchange data showed.
Daum, a listing on the junior KOSDAQ, was up 2.7 per cent after a volatile session, after listing 43 million new shares as part of its all-stock merger with messenger app maker Kakaotalk.
Oil refiners outperformed the broader market on prospects of higher margins. SK Innovation rallied 4.8 per cent, while S-Oil soared 4.9 per cent.
Brent oil prices tumbled on Monday to their lowest intraday level in nearly four years, after key Middle East producers said they would maintain high output despite weak demand conditions.
Dongkuk Steel jumped 9 per cent, while Union Steel climbed 8.6 per cent after announcing a merger early on Tuesday morning, disclosed by Dongkuk in a regulatory filing to the stock exchange.
The South Korean won firmed on Tuesday, tracking falls in the dollar after dovish comments from the US Federal Reserve hinted it could delay raising interest rates.
The local currency was quoted at 1,062.5 to the dollar as of 0125 GMT, compared with Monday's close of 1,067.9.
December futures on three-year treasury bonds shed 10 basis points to trade at 107.66.
Market participants will be on watch as the Bank of Korea convenes for its monthly policy meeting on Wednesday. Eighteen out of 30 analysts polled by Reuters are forecasting a rate cut.