Seoul: Shares end higher as US yields retreat, China policy anxiety eases

[SEOUL] South Korean shares extended gains to close higher on Wednesday, as US Treasury yields retreated further and worries about China's policy tightening eased. The won strengthened, while the benchmark bond yield fell.

The benchmark Kospi closed 39.12 points or 1.29 per cent higher at 3,082.99, rebounding from early declines of as much as 0.48 per cent.

Heavyweights such as technology giant Samsung Electronics gained 0.48 per cent and peer SK Hynix added 1.73 per cent. Internet giant Naver and biopharmaceutical firm Celltrion jumped 5.83 per cent and 3.95 per cent, respectively.

"Stabilising US Treasury yields, easing concerns about China's policy tightening (following a report that the People's Bank of China may cut lending rates) lifted investor sentiment," Daishin Securities' analyst Lee Kyoung-min said.

China Securities Journal reported that the PBOC may cut the RRR for some banks in March, a day after the country's top banking regulator said it was looking into ways to manage capital inflows to prevent risk of bubbles.

Meanwhile, investors eyed the negotiations over President Joe Biden's US$1.9 trillion Covid-19 relief bill, which is expected to go into overdrive this week and the upcoming China's key political conference, which is expected to start on Friday.

Foreigners were net sellers of 21 billion won (S$24.9 million) worth of shares on the main board.

The won ended at 1,120.3 per dollar on the onshore settlement platform, up 0.33 per cent.

In offshore trading, the won was quoted at 1,121.0 per dollar, up 0.4 per cent from the previous day, while in non-deliverable forward trading its one-month contract was quoted at 1,120.9.

The most liquid three-year Korean treasury bond yield fell by 0.1 basis point to 1.020 per cent, while the benchmark 10-year yield fell by 1.8 basis points to 1.948 per cent.

REUTERS