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Seoul: Stocks rise on Wall Street cheer, global stimulus
[SEOUL] South Korean shares rose on Thursday, tracking gains on Wall Street, and as global stimulus efforts to counter the economic impact from the coronavirus boosted sentiment.
The Korean won edged higher, while the benchmark bond yield rose. By 0224 GMT, the benchmark Kospi rose 6.4 points, or 0.3 per cent, to 2,065.73.
Foreign investors sold 124.6 billion won (S$145.5 million) worth of shares on the mainboard. On Wednesday, they snapped a seven-day selling spree totalling 4.7 trillion won. Foreigners were seen selling technology stocks, especially chip giants, said Lee Kyoung Min, analyst at Daishin Securities.
Samsung Electronics was down 0.9 per cent, while SK Hynix was trading flat.
An easing of global monetary and fiscal policies has supported the Kospi index from further falls, and it will recover to trade above the 2,100 level soon after the coronavirus spread passes its peak, Lee added.
The country reported 438 new virus cases, raising the national tally to 5,766 as of early Thursday. Three more died, with the death toll at 35, but new infections were seen slowing, supporting hopes that the peak of the epidemic may be over.
Meanwhile, Wall Street surged overnight, boosted by a strong performance by former Vice President Joe Biden in the Democratic primary contests.
The IMF is making available US$50 billion in emergency funding to help poor and middle-income countries tackle the epidemic, the International Monetary Fund said on Wednesday. This followed global monetary easing announced by the United States, Canada and Australia.
South Korea's central bank said on Wednesday that the Fed's emergency cut gives it more policy room to manoeuvre, though adding it could not confirm if it would hold an inter-meeting rate review this month ahead of the next scheduled meeting in April.
JPMorgan now sees South Korea's central bank cutting rates in March, "possibly through an inter-meeting action", with another cut in the third quarter on a close call, Park Seok Gil, executive director of Asia economic research, said in a report.
Yields on South Korea's three- and five-year treasury bonds dropped to record lows on Wednesday, as traders priced in lower borrowing costs in the near term.
The won was quoted at 1,185.8 per US dollar on the onshore settlement platform, 0.2 per cent higher than its previous close at 1,187.8.
In offshore trading, the won was quoted at 1,186.8 per US dollar, down 0.2 per cent from the previous day, while in non-deliverable forward trading, its one-month contract was quoted at 1,186.0 per US dollar.
The trading volume during the session in the Kospi index was 331.97 million shares. Of the total traded issues of 903, the number of advancing shares was 581.
The Kospi has fallen 6 per cent so far this year, while the won has lost 2.5 per cent against the US dollar.
In money and debt markets, March futures on three-year treasury bonds fell 0.12 points to 111.61.
The most-liquid three-year Korean treasury bond yield rose by 2.3 basis points to 1.1 per cent, while the benchmark 10-year yield rose by 3.6 basis points to 1.336 per cent.