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Seoul: Shares recover on IT stocks; investors await Sino-US talks

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[SEOUL] South Korean shares recovered from earlier falls to close slightly higher on Tuesday, buoyed by IT stocks after Samsung Electro-Mechanics Co Ltd posted solid quarterly earnings, while investors awaited a new round of trade talks between Chinese and US officials on Wednesday and Thursday. The Korean won and bond yields rose.

The Kospi stock index closed 6.06 points, or 0.28 per cent, higher at 2,183.36.

Earlier in the session, the index fell 0.7 per cent on worries of an escalation in Sino-US trade tensions after the US Justice Department charged China's Huawei Technologies Co Ltd with fraud.

Samsung Electro-Mechanics said earlier in the day that its fourth-quarter operating profit jumped 136 per cent to 252 billion won from a year earlier.

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The company said in its conference call that the supply of multi-layer ceramic capacitor in the market was not enough and that the company would expand its capacity, said Jeong Dai, an analyst with Meritz Securities.

Hopes for a better business environment in the IT industry seem to be continuing since the conference call over SK Hynix's earnings, Jeong added.

Shares of Samsung Electro-Mechanics rose 7.1 per cent, while tech giant Samsung Electronics Co Ltd and SK Hynix gained 1.0 per cent and 2.2 per cent, respectively. The sub-index for electric & electronics advanced 1.1 per cent.

Samsung Heavy Industries Co Ltd ended up 2.0 per cent after the company said it won an order worth 420 billion won to build two LNG carriers from Celsius Tankers, which are expected to be delivered by August 2021.

The won was quoted at 1,116.5 per dollar on the onshore settlement platform, 0.11 per cent firmer than its previous close at 1,117.7, extending gains into a third session.

In offshore trading, the won was quoted at 1,116.31 per US dollar, up 0.14 per cent from the previous day, while in one-year non-deliverable forwards it was being asked at 1,100.95 per dollar.

MSCI's broadest index of Asia-Pacific shares outside Japan was down 0.25 per cent, after US stocks ended the previous session with mild losses. Japanese stocks rose 0.08 per cent.

The KOSPI is up around 6.7 per cent so far this year, and up by 4.55 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 539,639,000 shares and, of the total traded issues of 896, the number of advancing shares was 292.

Foreigners were net buyers of 139,870 million won worth of shares.

The US dollar has risen 0.27 per cent against the won this year. The won's high for the year is 1,113.81 per dollar on Jan. 11 and low is 1,133.4 on Jan. 21.

In money and debt markets, March futures on three-year treasury bonds fell 0.02 points to 109.23.

The Korean three-month Certificate of Deposit benchmark rate was quoted at 1.86 per cent, while the benchmark three-year Korean treasury bond yielded 1.822 per cent, higher than the previous day's 1.82 per cent. 

REUTERS