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Seoul: Stocks gain on trade deal hopes; won inches down

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[SEOUL] South Korea's Kospi stock index rose on Monday, after reports that the United States and China were close to striking a trade deal later this month boosted investor sentiment. The Korean won inched down, while the benchmark bond yield rose.

The Wall Street Journal reported on Sunday US President Donald Trump and Chinese President Xi Jinping could reach a formal trade deal at a summit around March 27, given progress in talks between the two countries.

President Donald Trump said he has asked China to immediately remove all tariffs on US agricultural products because trade talks are progressing well and he did not impose 25 per cent tariffs on Chinese goods on Friday as originally planned.

China said on Saturday that it welcomed the release of language from the United State Trade Representative's office (USTR) delaying a scheduled hike in US tariffs on US$200 billion worth of Chinese goods.

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At 0205 GMT, the Kospi index rose 5.99 points, or 0.27 per cent, to 2,201.43 points. South Korean financial markets resumed trading on Monday after it was closed on Friday for a public holiday.

Shares of South Korean firms with exposure to North Korea fell after the second summit between US President Donald Trump and North Korean leader Kim Jong Un collapsed on Thursday over sanctions, raising concerns about the future of their denuclearisation negotiations.

The country's largest carmaker Hyundai Motor Co and its affiliates Kia Motors Corp and Hyundai Mobis Co Ltd tumbled as much as 4.4 per cent, 3.7 per cent and 5.4 per cent, respectively, after more vehicle recalls.

Kia Motors and affiliate Hyundai Motor said on Thursday they are recalling around 534,000 more US vehicles at risk of engine fires.

The won was quoted at 1,124.4 per US dollar on the onshore settlement platform, 0.03 per cent higher than its previous close at 1,124.7.

In offshore trading, the won was quoted at 1,124.9 per US dollar, up 0.2 per cent from the previous day, while in one-year non-deliverable forward trading its one-month contract was quoted at 1,123.8 per US dollar.

MSCI's broadest index of Asia-Pacific shares outside Japan was up 0.11 per cent, after US stocks ended the previous session with mild gains. Japanese stocks rose 0.83 per cent.

The Kospi has risen 7.86 per cent so far this year, and rose 6.3 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 184.18 million shares and, of the total traded issues of 895, the number of advancing shares was 651.

Foreigners were net sellers of 47.7 billion won worth of shares on the main board.

The won has lost 0.8 per cent against the US dollar this year. 

In money and debt markets, March futures on three-year treasury bonds fell 0.07 points to 109.15, while the three-month Certificate of Deposit rate was quoted at 1.89 per cent.

The most liquid three-year Korean treasury bond yield rose by 1.9 basis points to 1.832 per cent, while the benchmark 10-year yield rose by 3.7 basis points to 2.024 per cent.

REUTERS