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Seoul: Stocks jump on hopes of Trump-Kim summit; won gains

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[SEOUL] South Korea's Kospi stock index closed 1 per cent higher on Thursday, boosted by hopes of a second meeting between US President Donald Trump and North Korean leader Kim Jong Un next year to follow up the Singapore summit held in June. The Korean won and bond yields also rose.

At 0732 GMT, the KOSPI closed up 20.01 points or 0.97 per cent at 2,088.06. The market closed one hour later than usual on account of nationwide college entrance exams.

US Vice-President Mike Pence said on Thursday Mr Trump plans to meet Mr Kim in the new year but won't repeat past mistakes of allowing promises to be broken on pledges to end arms programmes.

After the report that the summit between the United States and North Korea is at planning stage, Kospi turned bullish as shares exposed to North Korea began to rise, said Jeong Dai, an analyst at Meritz Securities. Hyundai Elevator soared 9.3 per cent, while Hyundai Rotem and Sungshin Cement climbed 5.4 per cent and 7.1 per cent, respectively.

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Shares of South Korean firms engaged in duty free businesses surged after local media reported that China lifted a ban on the online sale of group tour programs to South Korea; Tonymoly closed up nearly 30 per cent, while duty free shares such as Shinsegae International and Hotel Shilla ended up 10.4 per cent and 13 per cent, respectively.

The won was quoted at 1,129.2 per dollar on the onshore settlement platform, 0.45 per cent firmer than its previous close at 1,134.3. In offshore trading, the won was quoted at 1,127.96 per U.S. dollar, up 0.33 per cent from the previous day, while in one-year non-deliverable forwards it was being transacted at 1,108.7 per dollar.

MSCI's broadest index of Asia-Pacific shares outside Japan was up 1.19 per cent, after U.S. stocks ended the previous session with mild losses. Japanese stocks weakened 0.2 per cent. The Kospi is down around 16.2 per cent so far this year, and down by 11.58 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 346,712,000 shares and, of the total traded issues of 896, the number of advancing shares was 499.

Foreigners were net sellers of 169,462 million won worth of shares.  The US dollar has risen 5.78 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 October 11 2018.

In money and debt markets, December futures on three-year treasury bonds fell 0.08 points to 108.72. 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 1.945 per cent, higher than the previous day's 1.92 per cent.

REUTERS