You are here
Seoul: Stocks end firmer on revived hopes of trade truce
[SEOUL] South Korea's Kospi index ended higher on Wednesday as US President Donald Trump's decision to meet his Chinese counterpart Xi Jinping this month rekindled optimism after a long lull. The South Korean won rose against the dollar, while the benchmark bond yield dropped.
The Seoul stock market's main Kospi closed up 26.08 points or 1.24 per cent at 2,124.79 points, marking its highest close since early May.
Mr Trump said on Tuesday he had spoken to Xi Jinping and that the two leaders' teams would restart trade talks in order to prepare for a meeting at the G-20 summit in Japan later this month.
The lingering trade tensions between the world's two largest economies have roiled markets and affected global economy. The talks between the two sides to reach a broad deal broke down last month and their interaction since then has been limited.
The local financial markets' rally was driven by the news of the meeting, especially with their positive comments on trade negotiations, said Seo Sang-young, an analyst at Kiwoom Securities. Mr Trump's speech at his re-election campaign without hardline remarks on diplomacy also supported investor sentiment, he added.
Mr Trump formally launched his 2020 re-election campaign on Tuesday by presenting himself as the same political insurgent who shook up the Washington establishment four years ago and who is now a victim of an attempted ouster by Democrats.
South Korean chipmakers, Samsung Electronics and SK Hynix, closed up 2.3 per cent and 6 per cent, respectively, on expectations that an upcoming summit between Washington and Beijing would ease trade tensions.
Foreigners were net buyers of 302.6 billion won worth of shares on the main board.
The won was quoted at 1,176.1 per dollar on the onshore settlement platform, 0.82 per cent higher than its previous close at 1,185.8. The currency marked its highest close in six weeks against the dollar.
In offshore trading, the won was quoted at 1,175.6 per US dollar, down 0.1 per cent from the previous session, while in non-deliverable forward trading its one-month contract was quoted at 1,174.2 per dollar.
MSCI's broadest index of Asia-Pacific shares outside Japan was up 1.75 per cent, after US stocks surged. Japanese stocks rose 1.72 per cent.
The Kospi rose 4.10 per cent so far this year, but lost 4.4 per cent in the previous 30 trading sessions.
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 843.34 million shares and, of the total traded issues of 892, the number of advancing shares was 537.
The won lost 5.1 per cent against the US dollar so far this year.
In money and debt markets, September futures on three-year treasury bonds rose 0.05 points to 110.42, while the 3-month Certificate of Deposit rate was quoted at 1.80 per cent.
The most liquid 3-year Korean treasury bond yield fell by 0.7 basis points to 1.486 per cent, while the benchmark 10-year yield dropped by 1.0 basis points to 1.604 per cent.