Seoul: Shares gain on oil output cut, pandemic slowdown hopes

[SEOUL] South Korean shares gained on Thursday, recovering a near 1 per cent loss in the previous session, as risk appetite was boosted by hopes that oil producers will agree output cuts and that the coronavirus pandemic is closer to reaching its peak. The South Korean won strengthened, while the benchmark bond yield fell.

The Seoul stock market's main Kospi closed up 29.07 points, or 1.61 per cent, to 1,836.21. It has fallen 16.45 per cent so far this year.

South Korea's central bank held its policy interest rate at a record low on Thursday, as widely expected, but signalled strong appetite for further cuts and unconventional policy to combat the economic hit from the coronavirus pandemic.

The bank also said it will conduct outright purchases of treasury bonds worth 1.5 trillion won (S$1.75 billion) on Friday to stabilise the bond market.

The country reported 39 new coronavirus cases on Thursday, bringing the national tally to 10,423.

Foreigners were net sellers of 132.7 billion won worth of shares on the main board, extending the selloff to a 26th straight session. They sold around 13.8 trillion won during the period.

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Crude oil futures rose on Thursday on expectations the world's largest oil producers would agree to cut production at a meeting later in the day.

Investors bet on a surge in oil prices with expectations that oil producers will reach an agreement to cut output at a meeting scheduled for later in the day, said Na Jeong-hwan, an analyst at DS Investment & Securities.

The won closed trading at 1,219.5 per US dollar on the onshore settlement platform, 0.11 per cent higher than its previous close at 1,220.9. It has lost 5.2 per cent against the US dollar so far this year.

In offshore trading, the won was quoted at 1,220.3 per dollar, down 0.4 per cent from the previous day, while in non-deliverable forward trading its one-month contract was quoted at 1,218.8.

In money and debt markets, June futures on three-year treasury bonds rose 0.13 points to 111.65, as the country's central bank chief signalled further easing and bond buying.

The most liquid three-year Korean treasury bond yield fell by 4.1 basis points to 0.987 per cent, while the benchmark 10-year yield fell by seven basis points to 1.440 per cent. 

REUTERS