Seoul: Stocks gain, 10-year yields pare gains after central bank announcement

[SEOUL] South Korean shares gained on Monday (Apr 4) tracking Wall Street futures, while 10-year Treasury yields erased some sharp earlier gains after the central bank said it would make an outright purchase of treasury bonds worth 2 trillion won (S$2.23 billion).

South Korea's benchmark 10-year treasury yield had earlier risen as much as 17.1 basis points to 3.178 per cent, its highest level since early June 2014.

The benchmark Kospi closed up 18.05 points, or 0.66 per cent, at 2,757.90, while the Korean won gained.

Leading gains, chip giants Samsung Electronics and SK Hynix rose 0.29 per cent and 0.86 per cent, respectively. Battery maker LG Energy Solution added 2.45 per cent.

US 2-year Treasury yields climbed to their highest level since early 2019 on Monday, continuing to push higher on expectations that the Federal Reserve would deliver bigger rate hikes in the months ahead to stem soaring inflation.

The country's prime minister nominee Han Duck-soo on Sunday listed curbing household debt and keeping fiscal soundness among the top priority policy goals.

Meanwhile, the bank's senior deputy governor separately said that the policy review meeting later this month will be a difficult one, citing the twin challenges of dealing with higher inflationary risks and downward pressure on growth.

Foreigners were net buyers of 22.1 billion won worth of shares on the main board.

The won ended at 1,214.4 per dollar on the onshore settlement platform, 0.09 per cent higher than its previous close.

In offshore trading, the won was quoted at 1,214.2, while in non-deliverable forward trading its 1-month contract was quoted at 1,214.6.

In money and debt markets, June futures on 3-year treasury bonds fell 0.27 point to 105.59. REUTERS