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Seoul: Shares hit fresh 5-month high on China rate cut; won falls
[SEOUL] South Korean shares scaled a fresh five-month intraday high on Monday as risk appetites were underpinned by China's decision to cut its policy interest rate over the weekend.
The People's Bank of China (PBOC) cut its benchmark lending and deposit rates on Saturday evening in a bid to tackle flagging growth in the world's second largest economy and South Korea's biggest trading partner.
The Korea Composite Stock Price Index (KOSPI) was up 0.33 per cent at 1,992.44 as of 0145 GMT, its highest level since Oct 1.
"The effects of the ECB's quantitative easing measures are starting to kick in, thereby also lifting the Chinese economy as well which is the largest exporter to the euro zone," said Kang Hyun-ki, an analyst at IM Investment & Securities.
The European Central Bank (ECB) convenes in Cyprus on Thursday where President Mario Draghi is expected to provide further details on the central bank's 1 trillion euro bond-buying stimulus programme.
Samsung Electronics rose more than 3.2 per cent after unveiling its latest Galaxy S smartphone model in a bid to reclaim the throne as undisputed global smartphone leader from leading rival Apple Inc.
Construction shares rallied with several brokerages forecasting a strong recovery in the housing market. Hyundai Engineering & Construction surged 6.1 percent, while Daewoo Engineering & Construction climbed 3 percent.
Kumho Industrial fell 1.9 per cent after South Korean retail giant Shinsegae Group said on Friday that it would not bid for a majority stake in the parent of Asiana Airlines .
The KOSPI 200 benchmark of core stocks rose 0.58 per cent, while the junior, tech-heavy KOSDAQ ticked up 0.05 per cent.
The South Korean won retreated against the dollar on Monday, as a falling yen rekindled worries of market intervention by the financial authorities to check the won's strength against the Japanese currency.
The local currency was fetching 1,103.1 to the dollar as of 0145 GMT, compared with 1,098.4 quoted at the end of Friday's session.
March futures on three-year treasury bonds added 0.11 basis point to trade at 108.67.