Seoul: Stocks post best day in 6 weeks on Powell remarks

[SEOUL] South Korean shares marked their best day in 6 weeks on Wednesday (Jan 12), as investors appeared pleased with a less-hawkish stance by the US Federal Reserve Chair Jerome Powell. The Korean won strengthened, while the benchmark bond yield fell.

The benchmark Kospi ended up 45.10 points, or 1.54 per cent, at 2,972.48, logging the sharpest rise since Dec 2.

Most heavyweights gained, with Samsung Biologics and Naver rising 2.88 per cent and 3.13 per cent, respectively, while LG Chem added 5.31 per cent.

The Kospi index tracked overnight gains on Wall Street after Powell pledged to tackle inflation to support economic growth and said the US central bank was ready for the start of tighter monetary policy.

Meanwhile, a Reuters poll showed the Bank of Korea is seen raising its policy rate to 1.25 per cent at its Friday meeting to restrain inflationary risks and the increasing debt that households are taking on to buy property.

Investor focus was also on US December inflation data expected later in the day, with headline CPI seen coming in at a red-hot 7 per cent on a year-on-year basis.

Foreigners were net buyers of 452 billion won (S$512.5 million) worth of shares on the main board.

The won ended at 1,190.5 per dollar on the onshore settlement platform, 0.35 per cent higher than its previous close. The unit strengthened to its highest level in more than 1 week.

In offshore trading, the won was quoted at 1,190.4, while in non-deliverable forward trading its 1-month contract was quoted at 1,190.9.

In money and debt markets, March futures on 3-year treasury bonds rose 0.12 point to 108.47.

The most liquid 3-year Korean treasury bond yield fell by 3.4 basis points to 2.004 per cent, while the benchmark 10-year yield dropped by 5.1 basis points to 2.434 per cent.

REUTERS