Seoul: Stocks end higher on Sino-US trade deal optimism; HK uncertainty caps gains

[SEOUL] South Korean shares snapped four days of losses on Friday, as China's remarks raised hopes for a preliminary trade deal with the United States, although worries over US human rights bills on Hong Kong capped gains. The South Korean won weakened, while the benchmark bond yield rose.

The Kospi index ended up 5.36 points, or 0.26 per cent, to 2,101.96. The benchmark index shed 2.79 per cent for the week, and recorded its first weekly decline in seven weeks. The index also marked its worst weekly loss since Aug. 9.

Chinese President Xi Jinping said on Friday that China wants to work out an initial trade agreement with the United States and has been trying to avoid a trade war, but it is not afraid to retaliate when necessary.

Mr Xi's remarks comes a day after Chinese commerce ministry said that China will strive to reach the agreement with Washington, while The Wall Street Journal reported that China has invited top US trade negotiators for a new round of face-to-face talks in Beijing, citing unnamed sources.

But concerns over trade deal still linger, with the US President Donald Trump expected to sign into law two bills backing protesters in Hong Kong after the US House of Representatives voted 417 to 1 for the "Hong Kong Human Rights and Democracy Act", which the Senate had passed unanimously a day earlier.

Foreigners were net sellers for a 12th consecutive day and sold around 286.3 billion won worth of shares on the main board.

The won was quoted at 1,178.9 per dollar on the onshore settlement platform, 0.07 per cent lower than its previous close at 1,178.1. The currency won lost 1.04 per cent on a weekly basis and marked its worst weekly loss since Aug 2.

In offshore trading, the won was quoted at 1,178.0 per US dollar, down 0.1 per cent from the previous day, while in non-deliverable forward trading, its one-month contract was quoted at 1,178.2 per dollar.

MSCI's broadest index of Asia-Pacific shares outside Japan was up 0.07 per cent, while US stocks inched down over trade woes. Japanese stocks rose 0.32 per cent.

The KOSPI has risen 2.98 per cent so far this year, but gained 3.4 per cent in the previous 30 trading sessions.

The trading volume during the session on the Kospi index was 495.78 million shares and, of the total traded issues of 906, the number of advancing shares was 414.

The won has lost 5.4 per cent against the dollar so far this year.

In money and debt markets, December futures on three-year treasury bonds rose 0.05 points to 110.28, while the three-month Certificate of Deposit rate was quoted at 1.53 per cent in late afternoon trade.

The most liquid three-year Korean treasury bond yield rose by 0.1 basis points to 1.460 per cent in late afternoon trade, while the benchmark 10-year yield rose by 2.7 basis points to 1.694 per cent.

REUTERS