Seoul: Stocks rise on global recovery hopes; virus woes persist

[SEOUL] South Korean shares gained on Wednesday after data from major economies fuelled hopes of a global recovery, although persisting worries about a resurgence in Covid-19 infections and its impact on the domestic economy capped gains. Both the won and the benchmark bond yield weakened.

The benchmark Kospi closed up 14.82 points or 0.63 per cent at 2,364.37. It, however, fell as much as 0.35 per cent during the session on continued foreign selling.

Data on Tuesday showed August factory activity in the United States rose more than expected, hours after a survey showed Chinese factory activity expanded during the month.

South Korea's daily cases were in triple digits for nearly three straight weeks, with its finance minister saying the government will need to give second cash handouts to some households to ease their economic strain.

Meanwhile, the country's annual inflation in August accelerated to its fastest in five months as the longest monsoon on record pushed up fresh food prices.

"There was no clear direction (in today's trading) but the foreign selloff continued to significantly affect the market," Hana Financial Investment analyst Lee Jae-sun said, adding the currency market did not fully reflect the weak dollar amid persisting worries over domestic Covid-19 resurgence.

Foreigners were net sellers of 264 billion won (S$302.5 million) worth of shares on the main board.

The won ended trading at 1,185.4 per US dollar on the onshore settlement platform, 0.2 per cent lower than its previous close at 1,183.0.

In offshore trading, the won was quoted at 1,185.7 per US dollar, unchanged from the previous day, while in non-deliverable forward trading its one-month contract was quoted at 1,185.7.

In money and debt markets, September futures on three-year treasury bonds rose 0.15 point to 111.86.

The most liquid three-year Korean treasury bond yield fell by six basis points to 0.919 per cent, while the benchmark 10-year yield fell by 4.7 basis points to 1.538 per cent.

REUTERS