Seoul: Shares jump as recession worries ease, foreigners return

SOUTH Korean shares rose 1.5 per cent on Monday (Jun 27), extending a buy-the-dip rally to a second session, as comments from a couple of US central bank officials alleviated recession worries, and foreign investors returned. The won and the benchmark bond yield also jumped.

The benchmark Kospi ended up 35.32 points or 1.49 per cent at 2,401.92, after rising 2.26 per cent on Friday.

Worries about an economic recession eased after US Federal Reserve Chair Jerome Powell and St Louis Fed President James Bullard’s remarks, said Mirae Asset Securities’ analyst Seo Sang-young.

Bullard downplayed the risk of a recession on Friday, saying that rate increases would probably slow the economy to a trend pace of growth, rather than below trend, following Powell’s remark on Thursday that a recession was not inevitable.

Among heavyweights, technology giant Samsung Electronics rose 0.68 per cent and peer SK Hynix jumped 3.71 per cent, while battery maker LG Energy Solution added 1.73 per cent. Automakers Hyundai Motor and Kia gained 5.78 per cent and 4.39 per cent, respectively.

Foreigners were net buyers of 267.4 billion won (S$288.6 million) worth of shares on the main board, ending a 6-session selling streak.

The won was last quoted at 1,286.5 per dollar on the onshore settlement platform, 0.91 per cent higher than its previous close.

In offshore trading, the won was quoted up 0.2 per cent at 1,285.9 per dollar, while in non-deliverable forward trading its 1-month contract was quoted at 1,285.1.

Of the total traded issues of 928 on the benchmark Kospi, 843 shares rose.

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In money and debt markets, September futures on 3-year treasury bonds fell 0.14 point to 103.35 in late afternoon trade.

The most liquid 3-year Korean treasury bond yield rose by 2.9 basis points to 3.555 per cent, while the benchmark 10-year yield rose by 7.3 basis points to 3.715 per cent. REUTERS