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Seoul: Stocks choppy, won eases as investors eye Japanese stimulus
[SEOUL] South Korean shares were choppy on Tuesday morning, while the won eased along with the Japanese yen as the dollar strengthened after Tokyo opened the door for more stimulus to boost its economy.
The Korea Composite Stock Price Index (Kospi) was up 0.1 per cent at 1,990.64 points as of 0220 GMT. The index touched a one week high earlier in the session but the gains were short-lived.
The won stood at 1,149.5 per dollar, down 0.2 per cent compared to Monday's close of 1,146.7.
"Strong Wall Street and upbeat second-quarter earnings guidance from many of the local companies pulled equities up earlier, but Japan signalling additional monetary easing seems to be pressuring them now," said Kang Hyun-gie, a stock analyst at Dongbu Securities.
Japanese Prime Minister Shinzo Abe ordered a new round of fiscal stimulus after a crushing election victory over the weekend as evidence mounted the corporate sector is floundering due to weak demand.
More stimulus from Japan would likely weaken the yen, boost the won and pressure stocks as the neighbouring country's exports would become more competitive, Mr Kang said.
Offshore investors were poised to be net buyers, purchasing 55.5 billion Korean won (S$65.2 million) worth of Kospi shares near mid-session.
Carmaker Ssangyong Motor Co Ltd rose 2.2 per cent while Hyundai Mobis Co Ltd gained 1.8 per cent.
Decliners outnumbered advancers 462 to 300.
September futures on three-year treasury bonds shed 0.02 point to 111.11.