Seoul: Stocks jump on revived hopes for trade deal

[SEOUL] South Korean shares ended 1 per cent higher on Monday, recovering some of last week's losses, as upbeat remarks from both United States and China revived hopes that the countries would reach an interim trade deal. The South Korean won and the benchmark bond yield rose.

China and the US are "very close" to a phase one trade deal, the Global Times, a tabloid run by the ruling Communist Party's official People's Daily, said on Monday.

US President Donald Trump on Friday said a trade accord with China is "potentially very close", just hours after the Chinese President Xi Jinping said Beijing wants to work out an interim or "phase one" trade pact.

On Saturday, US National Security Adviser Robert O'Brien said that an initial agreement with China is still possible by the end of the year, but warned Washington would not turn a blind eye to what happens in Hong Kong.

China has invited top US trade negotiators for a new round of face-to-face talks in Beijing, The Wall Street Journal said, citing unnamed sources. It added that Beijing hoped the talks could take place before next Thursday's US Thanksgiving holiday.

However, a potential standoff between the world's two largest economies on the Hong Kong issue threatened to complicate trade talks between the two countries.

Seoul stock market's main Kospi ended up 21.54 points, or 1.02 per cent, to 2,123.50.

Foreigners were net sellers for a 13th straight session, having sold 259.4 billion won worth of shares on the main board.

Kospi buoyed with the help of Trump's optimistic remark, while the better-than-expected US manufacturing surveys also cheered the market, Seo Sang-young, analyst at Kiwoom Securities said.

Shares of Samsung Heavy Industries closed 4.4 per cent higher after the company said it was awarded a 1.8 trillion won worth order to a build liquefied natural gas (LNG) carrier, which is expected to be delivered by September 2022.

South Korean budget airlines JejuAir and T'way Air gained 6.9 per cent and 3.2 per cent, respectively, on hopes of improving ties between Seoul and Tokyo after the two countries agreed to have formal talks next month.

The won was quoted at 1,176.0 per dollar on the onshore settlement platform, 0.25 per cent higher than its previous close at 1,178.9.

In offshore trading, the won was quoted at 1,175.6 per US dollar, up 0.3 per cent from the previous day, while in non-deliverable forward trading its one-month contract was quoted at 1,174.8 per dollar.

MSCI's broadest index of Asia-Pacific shares outside Japan was up 0.68 per cent, after US stocks gained on amicable remarks from both the US and China. Japanese stocks rose 0.78 per cent.

The Kospi has risen 4.04 per cent so far this year, but gained 2.8 per cent in the previous 30 trading sessions.

The trading volume during the session in the Kospi index was 392.24 million shares and, of the total traded issues of 907, the number of advancing shares was 684.

The won has lost 5.1 per cent against the dollar so far this year.

In money and debt markets, December futures on three-year treasury bonds fell 0.07 points to 110.20, while the 3-month Certificate of Deposit rate was quoted at 1.53 per cent in late afternoon trade.

The most liquid three-year South Korean treasury bond yield rose by 1.9 basis points to 1.475 per cent in late afternoon trade, while the benchmark 10-year yield rose by 3.8 basis points to 1.722 per cent.

REUTERS