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Seoul: Stocks rise to 21-month high after Trump speech; won falls
[SEOUL] South Korean shares rose to a near two-year high on Thursday morning, cheered by Wall Street's rally on US President Donald Trump's measured tone in his first speech to Congress, which flagged increased government spending and "massive" tax relief.
The Korea Composite Stock Price Index (Kospi) was up 0.5 per cent at 2,102.49 points as of 0203 GMT. It reached as high as 2,112.58 points, strongest since May 29, 2015.
South Korean markets were closed on Wednesday for a public holiday.
"Though Trump did not give specifics about his future plans, his speech did cheer investors there. Foreign investors are eagerly purchasing local equities on the back of this," said Kim Ye-Eun, a stock analyst at LIG Investment & Securities.
Offshore investors were set to be net buyers, purchasing 193.7 billion Korean won (S$239.41 million) worth of Kospi shares near mid-session.
"If the Federal Reserve raises rates in March, as many expect as of now, it would pressure the won more, resulting in stronger earnings for exporters," which in turn would boost the Kospi, said Mr Kim.
The South Korean won fell sharply by more than one per cent to over a one-week low of 1,144.9 on the heightened possibility of a Fed rate hike in March.
The won last stood at 1,141.1 against the US dollar, down one per cent compared to the previous close of 1,130.7.
The sub-index for major finance shares rose nearly 2 per cent. Hana Financial Group Inc gained nearly 4 per cent and KB Financial Group Inc 3 per cent.
Market heavyweight Samsung Electronics rose 2.2 per cent, while Naver Corp was up 3 per cent.
Decliners outnumbered advancers 445 to 337.
March futures on three-year treasury bonds shed 0.15 point to 109.39.