Seoul: Stocks rise on China's funding boost; won gains

[SEOUL] South Korea's Kospi stock index jumped on Tuesday, tracking Chinese shares fuelled by a boost in funding support, while US decision to hold off import tariffs on Mexico brought some relief to investors. The Korean won strengthened, while the benchmark bond yields also rose.

China's bluechip index rose 3 per cent after China said on Monday that it would allow local governments to use proceeds from special bonds as capital for major investment projects in a bid to support the slowing economy.

The Seoul stock market's main KOSPI closed up 12.32 points, or 0.59 per cent, to 2,111.81.

Fears that trade conflict could spread over other countries have eased after the United States stepped back from an immediate imposition of tariffs on Mexico, said Lee Won, an analyst at Bookook Securities.

Foreigners were net buyers of 69.1 billion won ($58.52 million) worth of shares on the main board.

The won was quoted at 1,180.4 per dollar on the onshore settlement platform, 0.41 per cent higher than its previous close at 1,185.2.

The currency won tracked Chinese yuan's gain after China's central bank said on early Tuesday it will sell yuan-denominated bills in Hong Kong in late June, cheering investors that the measure was aimed at stabilising the weakening yuan.

In offshore trading, the won was quoted at 1,180.5 per US dollar, up 0.2 per cent from the previous day, while in non-deliverable forward trading its one-month contract was quoted at 1,179.1 per dollar.

MSCI's broadest index of Asia-Pacific shares outside Japan was up 0.93 per cent, after US stocks ended its previous session with mild gains. Japanese stocks rose 0.33 per cent.

The Kospi has risen 3.47 per cent so far this year, and/but lost 4.6 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 542.18 million shares and, of the total traded issues of 891, the number of advancing shares was 646.

The won has lost 5.5 per cent against the US dollar so far this year.

In money and debt markets, June futures on three-year treasury bonds fell 0.04 points to 110.05, while the three-month Certificate of Deposit rate was quoted at 1.82 per cent.

The most liquid three-year Korean treasury bond yield rose by 0.8 basis points to 1.538 per cent, while the benchmark 10-year yield rose by 2.2 basis points to 1.679 per cent.

REUTERS