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Seoul: Stocks jump ahead of US payrolls, won up but capped
[SEOUL] South Korean shares and the won gained early on Friday, supported by positive expectations for US payrolls data and after oil stabilised, taking a breather from their recent falls.
The Korea Composite Stock Price Index (Kospi) is set for a third straight session of gains, rising to its highest intraday level since Jan 2. It was up 1.2 per cent at 1,928.04 points as of 0244 GMT.
The local currency firmed against the dollar for a second day, rising 0.4 percent to 1,093.1.
However, investors were wary of pushing the won firmer as the Korean currency's broad strength, especially against the Japanese yen, could spark government intervention.
One foreign exchange dealer in Seoul said some dollar-buying smoothing operations by authorities were suspected in early trade, although they could not be confirmed.
"Offshore players are selling dollars while the market seems to be betting more towards a stronger won as some views for an interest rate cut have backed off on recent positive economic forecasts," said another local-based bank dealer.
South Korea's finance minister and central bank governor both said earlier this week that the local economy will benefit from lower oil prices this year.
Friday's US jobs report is expected to show non-farm payrolls gained over 200,000 for an 11th straight month in December, which would be the longest stretch since 1994.
Encouraged by the upcoming data, foreigners and institutions propped up the Kospi early on Friday. Offshore investors were net buyers of 108.9 billion won (US$99.7 million) worth of stocks while institutions snapped up a net 63.6 billion won worth.
LG Electronics rose 1.3 per cent as market participants were optimistic over the company's handset business profits, which are expected to continue.
Shares in SK Hynix gained 1.5 per cent on news its rival chipmaker U.S.-based Micron Technology has been struggling to increase production volume.
Decliners outnumbered advancers 518 to 277.
The KOSPI 200 benchmark of core stocks was up 1.2 per cent, while the junior KOSDAQ gained 1.0 per cent.
March futures on three-year treasury bonds ticked down 0.01 point to trade at 108.35.