Seoul: Shares rise, won eases slightly after BOK rate cut

[SEOUL] South Korean shares rose early on Thursday following an interest rate cut by the Bank of Korea, and carmakers gained as some concerns over export markets faded slightly due to a stronger yen and on optimism that Greece may reach a deal with creditors.

The won currency eased slightly after the central bank cut its policy rate by 25 basis points to a record-low 1.50 per cent.

The won was down 0.4 per cent at 1,112.9 per dollar from the previous close at 1,108.2.

Analysts said the central bank's action had been anticipated, and they were doubtul whether there would be another.

"The effect of BOK's decision was limited on the currency market, as investors don't expect a further rate cut," said Park Yuna, a foreign exchange analyst at Dongbu Securities in Seoul.

June futures on three-year treasury bonds were up 0.02 points at 109.28 as of 0149 GMT.

Investors are waiting for a news conference from 11:20 am (0220 GMT) by the Bank of Korea's governor Lee Ju-yeol.

Meantime, the Korea Composite Stock Price Index (KOSPI) was up 0.5 per cent at 2,061.18 points as of 0149 GMT, from the previous close at 2,051.32.

"The Greek news eased some uncertainties, and the Japanese yen's rise after Kuroda's comments helped local car-makers to gain," said Kang Hyun-gie, a stocks analyst at Dongbu Securities.

Greek Prime Minister Alexis Tsipras held a new round of late-night talks with the leaders of Germany and France and agreed to intensify negotiations with Athens' creditors. If a deal is reached it could bolster the euro, which would be help South Korean exports to Europe The yen gained against most major currencies after the Bank of Japan Governor Haruhiko Kuroda said on Wednesday the yen was unlikely to weaken much further on a real effective exchange rate basis.

Against the won, the yen hovered around a near 3-week high.

The yen's rally was a boon for South Korean exporters that compete against Japanese rivals on key products like cars.

Market heavyweight Hyundai Motor Co gained 4 per cent, and its sister company Kia Motors Corp was up 4.8 per cent.

Samsung C&T Inc fell 5.7 pe rcent after the company sold its treasury shares to KCC Corp to secure a proposed US$8 billion merger with Cheil Industries Inc.

REUTERS