Seoul: Stocks snap losing streak on talks of Fed pause; won steady

[SEOUL] South Korea's Kospi stock index snapped a three-session losing streak to end higher on Friday, amid speculation that an expected US rate hike this month could be the last before Federal Reserve hits the pause button on its tightening cycle. The won steadied against dollar, while bond yields fell.

At 0630 GMT, the Kospi closed up 7.09 points or 0.34 per cent at 2,075.78. The main index shed earlier gains to dive 1 per cent for the week. Wall Street Journal reported Fed officials are considering whether to strike a wait-and-see attitude after a likely rate increase at their meeting in December.

The Wall Street snapped losses in expectations of retreat of Fed's monetary policy, Lee Kyoung-min, an analyst at Daishin Securities, said in a note, noting that KOSPI rally on Friday was led by foreigners buying.

Chinese commerce ministry hailed the Trump-Xi summit on Thursday, saying it's very confident in reaching an agreement with the United States in 90 days. In response, US President Donald Trump echoed the statement on his twitter.

However, there was no escaping concerns over Sino-US relations after the arrest of smartphone maker Huawei Technologies Co Ltd Chief Financial Officer Meng Wanzhou threatened to chill talks on some form of trade truce.

The won was quoted at 1,119.8 per dollar on the onshore settlement platform, 0.04 per cent firmer than its previous close at 1,120.3. The currency added 0.1 per cent for a week.

In offshore trading, the won was quoted at 1,119.5 per US dollar, down 0.16 per cent from the previous day, while in one-year non-deliverable forwards it was being transacted at 1,099.95 per dollar.

MSCI's broadest index of Asia-Pacific shares outside Japan was up 0.34 per cent, after US stocks ended the previous session with mild losses. Japanese stocks rose 0.82 per cent.

The Kospi is down around 16.2 per cent so far this year, and down by 0.26 per cent in the previous 30 days. The current price-to-earnings ratio is 12.10, the dividend yield is 1.28 per cent and the market capitalisation is 1,242.04 trillion won.

The trading volume during the session on the KOSPI index was 362,788,000 shares and, of the total traded issues of 896, the number of advancing shares was 454.

Foreigners were net buyers of 11,034 million won worth of shares. The US dollar rose 4.98 per cent against the won this year. The won's high for the year is 1,053.55 per dollar on April 2 and low is 1,146.26 on Oct. 11.

In money and debt markets, December futures on three-year treasury bonds rose 0.02 points to 109.2. The South Korean three-month Certificate of Deposit benchmark rate was quoted at 1.9 per cent, while the benchmark three-year Korean treasury bond yielded 1.832 per cent, lower than the previous day's 1.84 per cent.

REUTERS