Seoul: Shares strengthen on vaccine hopes, EU stimulus deal

[SEOUL] South Korean shares rose nearly 1.5 per cent on Tuesday as investors cheered promising data from trials of three potential Covid-19 vaccines and the European Union stimulus deal. The Korean won and the benchmark bond yield both rose.

The benchmark Kospi closed 30.63 points or 1.39 per cent higher at 2,228.83.

Early data from trials of three potential Covid-19 vaccines released on Monday, including a closely-watched candidate from Oxford University, increased confidence that a vaccine could train the immune system to recognise and fight the novel coronavirus without serious side effects.

European Union leaders reached a deal on a massive stimulus plan for their coronavirus-blighted economies at a pre-dawn meeting after a fractious summit that went through the night and into its fifth day.

Meanwhile, South Korea's economy likely saw its biggest contraction in over 20 years in the second quarter, a Reuters poll showed, as the pandemic hit consumer spending, the labour market, and global demand for its exports. The preliminary data will be released early on Thursday.

Foreigners bought net 442.40 billion won (S$510.8 million) worth of shares on the main board, their largest since Feb 5.

The won ended trading at 1,197.8 per US dollar on the onshore settlement platform, 0.45 per cent higher than its previous close at 1,203.2.

In offshore trading, the won was quoted at 1,197.7 per US dollar, up 0.3 per cent from the previous day, while in non-deliverable forward trading its one-month contract was quoted at 1,197.4.

In money and debt markets, September futures on three-year treasury bonds fell 0.05 point to 112.14.

The most liquid three-year Korean treasury bond yield rose by 1.6 basis points to 0.818 per cent in late afternoon trade, while the benchmark 10-year yield rose by 2 basis points to 1.354 per cent.

REUTERS