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Seoul: Stocks rise on foreign buying; won gains

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[SEOUL] South Korea's Kospi stock index closed higher on Wednesday as foreigners bought local equities, which soothed concerns around widening Sino-US trade war. The South Korean won strengthened following forex officials' warning to curb its further weakness, while the benchmark bond yield fell.

The Seoul stock market's main Kospi closed up 3.61 points, or 0.18 per cent, at 2,064.86.

The US administration is considering limits to Chinese video surveillance firm Hikvision's ability to buy US technology, the New York Times reported, in a move that deepens worries about trade frictions between the world's two top economies.

The report fuelled concerns but this brought investors' expectation of Chinese stimulus measures, which led to foreigners buying of Kospi futures, said Lee Kyoung-min, an analyst at Daishin Securities.

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South Korea's monetary policy needs to be substantially accommodative to counter slowing inflation and sluggish domestic demand, a state-run think tank said, lowering the growth forecasts for this year to 2.4 per cent. Foreigners were net buyers of 4.1 billion won worth of shares on the main board.

The won was quoted at 1,192.8 per dollar on the onshore settlement platform, 0.10 per cent higher than its previous close at 1,194.0, after hitting a new two-year low at 1196.5 per dollar in early trading.

The currency managed to turn higher after the authorities' verbal intervention, which came along with FX dealers' suspicion over the authorities' sales of dollar to support won. FX officials said they will hold meeting to discuss disorderly movements in market. ** In offshore trading, the won was quoted at 1,192.9 per U.S. 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 1,192.4 per dollar.

MSCI's broadest index of Asia-Pacific shares outside Japan was up 0.04 per cent, after U.S. stocks closed up . Japanese stocks rose 0.05 per cent.

The Kospi has risen 1.17 per cent so far this year, and fell 6.7 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 500.52 million shares and, of the total traded issues of 895, the number of advancing shares was 390.

The won has lost 6.5 per cent against the US dollar this year.

In money and debt markets, June futures on three-year treasury bonds rose 0.01 points to 109.70, while the 3-month Certificate of Deposit rate was quoted at 1.84 per cent.

The most liquid three-year Korean treasury bond yield rose by 0.4 basis points to 1.666 per cent, while the benchmark 10-year yield fell by 0.2 basis point to 1.827 per cent. 

REUTERS