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Seoul: Stocks recoup losses on China stimulus hopes; won jumps

[SEOUL] South Korea's Kospi stock index ended flat on Monday, tracking the rebound in China stock markets as the country's central bank pledged to further support the slowing economy. The South Korean won gained, snapping seven straight session of losses, and the benchmark bond yields also climbed.

The benchmark Kospi index closed nearly unchanged at 2,138.10 points, 0.66 points or 0.03 per cent up from its previous close. Earlier in the session, it dropped 11.9 points or 0.6 per cent. ** Shares in China rebounded on Monday after the country's central bank pledged to further support the slowing economy by spurring loans and lowering borrowing costs. Shanghai Composite index was up 1.92 per cent at 3,026.99, after plunging 4.4 per cent on Friday, while China's blue-chip CSI300 index was up 1.98 per cent, recovering from a 4 per cent drop on Friday.

The meagre payroll gains reported by the Labor Department on Friday were the weakest since September 2017, with a big drop in the weather-sensitive construction industry. They also reflected a decline in hiring by retailers and utility companies as well as the transportation and warehousing sector, which is experiencing a shortage of drivers.

"As we predict this week to be volatile ahead of the double-witching day, Kospi market managed to close flat as Fed's signal to hold rates and money flowing into Chinese market eased investor sentiment," Lee Won, an analyst at Bookook Securities.

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Federal Reserve chairman Jerome Powell said on Sunday the US central bank does "not feel any hurry" to change the level of interest rates again as it watches how a slowing global economy affects local conditions in the United States.

Shares of YG Entertainment Inc, one of South Korea's three major K-pop talent agencies, plunged as much as 15.6 per cent, marking their biggest percentage loss since November 2005. The stock dropped after a member of South Korean K-pop band Big Bang, managed by the agency, has been booked on alleged sex bribery.

The country's transport ministry said on Monday that it is conducting emergency safety inspection on two Boeing 737 MAX 8 aircraft, which are operated by South Korean budget carrier Eastar Jet.

The ministry's comments came after the latest version of Boeing Co's best-selling 737 family - a global industry workhorse - has again been thrust into the spotlight after a fatal crash in Ethiopia, months after a deadly crash involving an identical brand-new jet in Indonesia.

Foreigners were net sellers of 109.7 billion won worth of shares on the main board.

The won was quoted at 1,133.7 per dollar on the onshore settlement platform, 0.22 per cent higher than its previous close at 1,136.2, snapping the previous seven-day losing streak.

In offshore trading, the won was quoted at 1,133.5 per US dollar, down 0.1 per cent from the previous day, while in one-year non-deliverable forward trading its one-month contract was quoted at 1,132.5 per dollar.

MSCI's broadest index of Asia-Pacific shares outside Japan was up 0.37 per cent, after US stocks ended the previous session with losses. Japanese stocks rose 0.47 per cent.

The Kospi climbed 4.76 per cent so far this year, and rose 0.6 per cent in the previous 30 trading sessions.

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 260.05 million shares and, of the total traded issues of 896, the number of advancing shares was 338.

The won has lost 1.6 per cent against the US dollar this year.

In money and debt markets, March futures on three-year treasury bonds fell 0.02 per cent to 109.23, while the three-month Certificate of Deposit rate was quoted at 1.89 per cent.

The most liquid three-year Korean treasury bond yield rose by 0.8 basis points to 1.810 per cent, while the benchmark 10-year yield rose by 1.1 basis points to 1.984 per cent. 

REUTERS