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Seoul: Stocks shed losses, won up on government stimulus plan
[SEOUL] South Korean shares erased initial losses and the won was higher in early trade on Tuesday, as volatility after Britain's vote to exit the European Union eased and a government fiscal package to boost the domestic economy boosted sentiment.
As of 0234 GMT, the Korea Composite Stock Price Index (Kospi) was steady at 1,927.76 points.
After opening lower, the index rose when the government said it will propose a supplementary budget of around 10 trillion won (S$11.55 billion) soon to counter negative effects of Brexit as well as weak exports and the restructuring of the troubled shipping and shipbuilding industries.
The won stood at 1,173.8 per US dollar, up 0.7 per cent compared with Monday's close of 1,182.3, reflecting the rebound for the stock market.
"Fears about Brexit have calmed down pretty much as of now. What is left is how the European Union and major central banks would deal with the aftermath," said Park Seok Hyun, a stock analyst at Eugene Investment & Securities.
He added that investors should wait for the result of two-day EU leaders summit, starting later Tuesday, to predict how the Kospi will move in the near-term.
Foreign investors were expected to be net sellers of shares for a third consecutive day. Near mid-session, they had offloaded a net 226.4 billion Korean won of Kospi shares, weighing on the index.
Automobile company Hyundai Motor Co lost 1.1 per cent while shares of Samsung SDI Co Ltd were down 1.9 per cent.
Advancing issues outnumbered losing ones by 520 to 276.
September futures on three-year treasury bonds held steady at 111.04 point.