Seoul: Shares jump as recovery hopes rise, North Korea tensions diffuse

[SEOUL] South Korean shares ended higher on Wednesday as hopes of global economic recovery firmed after upbeat data from the United States and the eurozone and worries over tensions with North Korea eased. The won strengthened, while the benchmark bond yield fell.

The Seoul stock market's benchmark Kospi closed up 30.27 points or 1.42 per cent at 2,161.51.

US business activity contracted for a fifth straight month in June, but at a slower pace, supporting views that the virus-driven recession was drawing to an end, while the historic downturn in the euro zone also eased as businesses started reopening.

North Korea has decided to suspend military action plans against South Korea, the official KCNA news agency reported on Wednesday, sending defence-related shares into a tailspin.

Market heavyweights led gains in Kospi, with Samsung Electronics and SK Hynix rising as much as 4.9 per cent and 3.9 per cent, respectively.

Shares of Samsung BioLogics closed up 2.12 per cent after the drugmaker said it had bagged a 381 billion won (S$438.4 million) order to make biopharmaceuticals for a European firm.

Foreigners were net sellers of 155.90 billion won worth of shares on the main board.

The won closed trading up 0.78 per cent, its sharpest daily gain in more than two weeks, at 1,199.4 per dollar on the onshore settlement platform.

In offshore trading, the won was quoted up 0.7 per cent at 1,199.2 per dollar, while in non-deliverable forward trading its one-month contract was quoted at 1,199.1.

In money and debt markets, September futures on three-year treasury bonds rose 0.06 points to 112.13.

The most liquid 3-year Korean treasury bond yield fell by 0.8 basis point to 0.820 per cent, while the benchmark 10-year yield fell by 2.1 basis points to 1.365 per cent.

REUTERS