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Seoul: Shares set to post biggest daily gain in 4 weeks; won up
[SEOUL] South Korean shares were poised to post their sharpest daily gain in four weeks on Thursday after the US Federal Reserve signalled a more dovish tone than earlier expectations following its two-day meeting on Wednesday.
The Korea Composite Stock Price Index (KOSPI) was up 0.7 per cent at 2,049.14 points as of 0301 GMT, against the previous close of 2,034.86. If the market maintains its gains, it would be the largest daily percentage rise since May 22.
The US central bank said the economy was likely strong enough to support an interest rate increase by the end of the year. But it lowered its expectations for 2015 economic growth because of a weak start to the year and reduced its growth and federal funds rate forecast.
"Market (participants) got liquidity from this FOMC, but didn't get the signal of economic momentum that was needed for the global stock markets with broadly higher price-earnings ratio recently," said Rhoo Yong-seok, an analyst at Hyundai Securities.
Samsung SDS Co Ltd, a sister company of tech giant Samsung Electronics, rose as much as 8.1 per cent before pulling back to stand 2.9 per cent higher on expectations of merger with Samsung SDI Co Ltd.
Samsung SDI was also up 1.2 per cent after rising as much as 2.8 per cent to a three-week intraday high.
On the currency market, the South Korean won joined most of its regional peers in gaining against the dollar, touching a week high by midday.
The won was up 0.8 per cent at 1,108.5 after edging as high as 1,108.1, the highest level since June 11.
The dollar was broadly weaker as the market digested the US Federal Reserve's dovish messages.
"After the Fed, there is the Greek issue which will still make the won volatile," said Jeon Seung-Ji, a foreign-exchange analyst at Samsung Futures.
"Greek risks may linger until the end of June, and it will weigh on the won hovering around the 1,100 level." The Bank of Greece said on Wednesday that the country's future in the European Union itself could also be at risk without a deal.
September futures on three-year treasury bonds were up 0.09 point at 109.08.