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Seoul: Shares touch 5-1/2 mth high; won steady before Fed
[SEOUL] South Korean shares continued to climb on Tuesday on anticipation that the Federal Reserve may push back the timing of interest rate hikes based on weaker-than-expected fresh US economic data.
The benchmark Korean Composite Stock Price Index (KOSPI) , which the past two sessions, was up 1.51 per cent to 2,017.34 points as of 0235 GMT. On Monday, it closed at 1,987.33 points.
The KOSPI touched its highest since late September in early trade.
"The chance of early rate hikes in US slightly declined as the US central bank could become more cautious about normalizing interest rates during this week's FOMC's meeting,"said Han Yo-seop, an analyst at KDB Daewoo Securities.
Later in the global day, the Federal Open Market Committee will begin a two-day policy meeting, where many analysts expect the central bank to drop the word "patient" from its formal statement.
South Korean market bellwether Hyundai Motor gained over 3 per cent near midday after announcing its plan for an updated car model.
Brokerage shares outperformed, as they tracked US shares and were helped by the Bank of Korea's interest rate cut late last week.
Institutions were poised to be net buyers after a 13-day selling streak, while individuals dumped around 154 billion won (US$136.26 million) of local stocks early in the session.
The South Korean won edged up 0.1 per cent rose to 1,130.2 against the dollar as of 0235 GMT from the previous close at 1,131.5, as the dollar weakened ahead of the Fed meeting.
"Even if the US central bank deletes the word patient from its meeting statement, the global market will not react radically given Janet Yellen's dovish tendencies," said Hong Seok-chan, a foreign exchange analyst at Daishin Securities.
Bonds were little changed, with lead March futures for three-year treasury bonds were down 0.04 points at 109.01 by 0235 GMT.