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Seoul: Stocks gain on rate-cut hopes after China cenbank reforms

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[SEOUL] South Korean shares rose on Monday, as risk appetite partially recovered after China's central bank unveiled reforms to its monetary rate policy, leading to expectations of an early rate cut. The South Korean won weakened, while the benchmark bond yield rose.

The Seoul stock market's main Kospi ended up 12.73 points, or 0.66 per cent, at 1,939.90.

Foreigners were net sellers of 141.1 billion won worth of shares on the main board. They registered net sales of Kospi shares for 13th consecutive session, the longest since January 2016.

South Korean stocks pared some loss that started in early August, but investors will remain cautious until Fed chairman Jerome Powell's speech at Jackson Hole, said Huh Jae-hwan, analyst at Eugene Investment Co.

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The People's Bank of China (PBOC) on Saturday unveiled key interest rate reforms to help steer borrowing costs lower for companies and support a slowing economy caught in the grip of a bruising trade war with the United States.

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The won was quoted at 1,211.0 per dollar on the onshore settlement platform, 0.02 per cent lower than its previous close at 1,210.8.

In offshore trading, the won was quoted at 1,209.9 per US dollar, down 0.2 per cent from the previous day, while in non-deliverable forward trading its one-month contract was quoted at 1,209.7 per dollar.

MSCI's broadest index of Asia-Pacific shares outside Japan was up 1.17 per cent, after US stocks rose. Japanese stocks rose 0.71 per cent.

The Kospi has fallen 4.96 per cent so far this year, and lost 8.6 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 in the KOSPI index was 472.39 million shares and, of the total traded issues of 893, the number of advancing shares was 633.

The won has lost 7.9 per cent against the US dollar so far this year.

In money and debt markets, September futures on three-year treasury bonds fell 0.02 points to 111.44, while the three-month Certificate of Deposit rate was quoted at 1.49 per cent.

The most liquid three-year South Korean treasury bond yield fell by 0.2 basis points to 1.093 per cent, while the benchmark 10-year yield rose by 1.3 basis points to 1.185 per cent.

REUTERS