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Seoul: Won, stocks rise as Federal Reserve's Sept rate hike seems unlikely

Monday, September 5, 2016 - 10:36
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The South Korean won and shares rose to their strongest in over two weeks early on Monday as weaker than expected US jobs data reduced speculation on an imminent increase in US interest rates.

[SEOUL] The South Korean won and shares rose to their strongest in over two weeks early on Monday as weaker than expected US jobs data reduced speculation on an imminent increase in US interest rates.

The won was quoted at 1,109.3 per US dollar as of 0208 GMT, up 0.7 per cent compared to the previous close of 1,117.2.

The Korea Composite Stock Price Index (Kospi) was up 0.8 per cent at 2,055.58 points.

The currency and the stocks were both at their strongest since Aug 19 of this year.

US employment growth slowed more than expected in August after two straight months of robust gains while wages were tepid, which could effectively rule out an interest rate increase from the Federal Reserve this month.

"Though the chances of rate increase is low for now, what is important is how the Fed officials look at it," said Jung Sung Yoon, a foreign exchange analyst at Hyundai Futures.

Mr Jung said the won will be sensitive to whatever US officials say in speeches scheduled this week.

Offshore investors were poised to be net buyers for the day, purchasing 181.2 billion Korean won (S$222.03 million) worth of Kospi shares near mid-session, buttressing the index.

Shares in Hanjin Shipping slumped by the daily limit of 30 per cent in resumed trade on Monday as the company struggles to contain the fallout of its collapse.

Shares of battery maker Samsung SDI opened at its 10-week low, weighed by earnings concerns after key client Samsung Electronics Co Ltd announced a recall of Galaxy Note 7 phones due to fire-prone batteries.

Advancers outnumbered decliners 478 to 324.

September futures on three-year treasury bonds gained 0.04 point to 110.77.

REUTERS