Seoul: Shares rise nearly 2% as recession worries ease, chipmakers rally

SOUTH Korean shares rose nearly 2 per cent on Monday (Jul 18), led by heavyweight chipmakers, while easing economic recession worries after strong US data also boosted sentiment. The won strengthened, while the benchmark bond yield was flat.

The benchmark Kospi ended up 44.27 points or 1.9 per cent at 2,375.25, its highest closing since Jun 29.

Technology giant Samsung Electronics and peer SK Hynix rallied for a second session and closed up 3.17 per cent and 2.33 per cent, respectively, at their highest since mid-June.

Among other market heavyweights, internet platform companies Naver and Kakao rose 6.71 per cent and 3.85 per cent each, while battery maker LG Energy Solution lost 1.75 per cent.

Strong US economic indicators also lifted sentiment, though there is a possibility that the strength may be temporary, said Mirae Asset Securities’ analyst Seo Sang-young.

US data released on Friday eased economic recession worries with stronger-than-expected retail sales, an uptick in consumer sentiment, lower inflation expectations and cooling import prices.

South Korea will exempt taxes on income from investing in Korean treasury bonds to attract foreign investment, finance minister Choo Kyung-ho told reporters on Sunday during his Bali visit.

Foreigners were net buyers of shares worth 632.8 billion won (S$672.9 million) on the main board, their biggest daily purchase since May 31.

The won was last quoted at 1,317.4 per dollar on the onshore settlement platform, 0.66 per cent higher than its previous close.

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In offshore trading, the won was quoted up 0.1 per cent at 1,317 per dollar, while in non-deliverable forward trading its 1-month contract was quoted at 1,316.5.

In money and debt markets, September futures on 3-year treasury bonds were flat at 104.94 in late afternoon trade.

The most liquid 3-year Korean treasury bond yield fell by 2.1 basis points to 3.195 per cent, while the benchmark 10-year yield inched down by 0.2 basis point to 3.255 per cent. REUTERS