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Seoul: Stocks gain, won edges up; North Korea retaliation for UN sanctions feared
[SEOUL] South Korean shares rose to a near two-week high and the won edged up early on Tuesday as investment sentiment improved following gains in the US stock markets overnight.
Further rises were capped, however, after the United Nations Security Council unanimously stepped up sanctions against North Korea raising some anxiety over retaliatory action by Pyongyang.
The new sanctions came after Pyongyang's sixth and most powerful nuclear test conducted on Sept 3, and imposed a ban on the country's textile exports and capped its imports of crude oil at current levels.
The Korea Composite Stock Price Index (Kospi) was up 0.3 per cent at 2,364.92 points as of 0154 GMT, highest intraday trading level since Aug. 31.
The won was quoted at 1,130.7 to the US dollar, up 0.1 per cent versus Monday's close of 1,131.9.
"Investors seem to be thinking that the new sanctions from the UN at least have some possibilities to prompt another provocation from North Korea," said Kim Ye Eun, a stock analyst at Cape Investment & Securities.
She added that the Federal Reserve's September policy meeting, which starts on Sept 19, has also led some market players to stay on the sidelines.
Offshore investors were poised to be net sellers of Kospi shares.
They sold 56.9 billion Korean won (S$67.54 million) worth near mid-session.
Cosmetics-related shares pared Monday's losses with Amorepacific up 1.3 per cent and Hankook Cosmetic up 5.6 per cent.
Market heavyweight SK Hynix gained nearly one per cent.
Advancing issues outnumbered declining ones 416 to 346.
September futures on three-year treasury bonds lost 0.01 point to 109.30.