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Seoul: Stocks jump on US-China trade optimism; won gains

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[SEOUL] South Korea's Kospi stock index ended up nearly 2 per cent on Wednesday on growing optimism over trade deal between the United States and China. The South Korean won inched up while bond yields also rose.

The US trade delegation in Beijing is "wrapping up" meetings with Chinese officials and will return to the United States later on Wednesday after a "good few days", a US official said.

At 0630 GMT, the KOSPI closed up 39.44 points or 1.95 per cent at 2,064.71. The benchmark index posted its biggest daily per centage gain since November 2018.

Expectations over trade negotiation between the US and China lifted Kospi, while reports on the US trade delegation boosted the gains, said Seo Sang-young, an analyst at Kiwoom Securities.

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South Korea's sub-index for electric and electronic and transportation equipment towed gains in the Kospi market after the Chinese government plans to boost domestic spending on autos and home appliances, Seo added.

China plans to introduce policies to boost domestic spending on items such as cars and home appliances this year, state television CCTV quoted a senior state planning official as saying on Tuesday.

Shares of Samsung Electronics Co Ltd and SK Hynix Inc closed up 3.9 per cent and 7.4 per cent, respectively, on bargain-hunting as investors expect the stocks to bounce back from its recent lows.

Shares of South Korean publisher Samsung Publishing Co Ltd ended 29.8 per cent higher as children's song Baby Shark, breaks into Top 40 on Billboard Hot 100 chart. The publisher owns around 20 per cent stake of Smart Study, which created the song that went viral.

The won was quoted at 1,122.1 per dollar on the onshore settlement platform, 0.18 per cent firmer than its previous close at 1,124.1.

In offshore trading, the won was quoted at 1,121.31 per US dollar, up 0.05 per cent from the previous day, while in one-year non-deliverable forwards it was being asked at 1,105.55 per dollar.

MSCI's broadest index of Asia-Pacific shares outside Japan was up 1.50 per cent, after US stocks ended the previous session with gains. Japanese stocks rose 1.1 per cent.

The Kospi is down around 0.8 per cent so far this year, and down by 2.16 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 379,519,000 shares and, of the total traded issues of 897, the number of advancing shares was 646.

Foreigners were net buyers of 384,760 million won worth of shares.

The won's high for the year is 1,114.7 per dollar on Jan 2 and low is 1,130.05 on Jan 3.

In money and debt markets, March futures on three-year treasury bonds remained flat at 109.23.

The Korean three-month Certificate of Deposit benchmark rate was quoted at 1.86 per cent, while the benchmark three-year Korean treasury bond yielded 1.813 per cent, higher than the previous day's 1.81 per cent.

REUTERS