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Seoul: Stocks jump most in 7 years; won sees best day in 21 months

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[SEOUL] Seoul stocks saw their best day in almost seven years on Friday, ending 3.5 per cent higher, on expectations of progress in Sino-US trade negotiations. The country's won shot up the most in 21 months.

"A series of recent events helped clear some of the global uncertainties and boosted risk assets, but it depends on what really (Chinese President) Xi Jinping would offer for this rally to sustain," says Kim Doo-un, an analyst at KB Securities.

"Ahead of the US midterm election on Nov 6, a consensus that the Democratic Party would take over the lower house also lifted hopes to stop (President) Trump's sole lead," adds Kim Ji-hyung, an analyst at Hanyang Securities.

Bloomberg reported that Mr Trump is interested in reaching a trade agreement with Mr Xi at the Group of 20 nations summit in Argentina later this month and has asked key US officials to begin drafting potential terms, citing people familiar with the matter.

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At the end of the session, the Kospi was up 71.54 points or 3.53 per cent at 2,096.00. The benchmark stock index rose 3.4 per cent on a weekly basis, reaching its highest since February 2016. The country's large-cap firms rose across the board as chip giants Samsung Electronics and SK Hynix ended 4.7 per cent and 6.3 per cent higher, respectively. Chemical firm LG Chem and steelmaker Posco jumped 5.6 per cent and 6.0 per cent, respectively.

The won was quoted at 1,121.6 per dollar on the onshore settlement platform at the end of the session, up 1.47 per cent from its previous close of 1,138.1. For the week, the currency is up 1.8 per cent against the dollar, marking the biggest weekly gain since July 2017.

In offshore trading, the won was quoted at 1,121.53 per US dollar, up 0.23 per cent from the previous day, while in one-year non-deliverable forwards it was being transacted at 1,103.45 per dollar.

MSCI's broadest index of Asia-Pacific shares outside Japan was up 2.59 per cent, after US stocks ended the previous session with gains. Japanese stocks rose 2.56 per cent.

The KOSPI is down around 18 per cent so far this year, and is down by 11.45 per cent in the previous 30 days.

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 364,081,000 shares, and of the total traded issues of 899, the number of advancing shares was 822. Foreigners were net buyers for a third session to the tune of 440,123 million won worth of shares, the largest since Sept 21.

The US dollar has risen 5.17 per cent against the won this year. The won's high for the year is 1,053.55 per dollar on April 2 2018 and low is 1,146.26 on Oct 11, 2018. In money and debt markets, December futures on three-year treasury bonds fell 0.15 points to 108.59.

The Korean three-month Certificate of Deposit benchmark rate was quoted at 1.7 per cent, while the benchmark three-year Korean treasury bond yielded 1.987 per cent, higher than the previous day's 1.94 per cent.

REUTERS