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Seoul: Stocks snap 4 sessions of losses; all eyes on Fed, Trump

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[SEOUL] South Korean shares inched higher on Tuesday, snapping four straight sessions of losses, as investors awaited the US Federal Reserve's two-day policy meeting starting later in the day and US President Donald Trump's planned speech at his official launch of 2020 re-election campaign. The won strengthened, while the benchmark bond yield fell.

The main Kospi stock index closed up 7.98 points, or 0.38 per cent, at 2,098.71 points.

In addition to the Fed meeting, Trump's speech is scheduled later in the day where he is expected to reveal his vision about the trade issue between the United States and China, said Na Jong-hwan, an analyst at DS Investment & Securities. Ahead of several big events, the major index's movement was limited, he added.

Mr Trump will formally launch his 2020 re-election campaign on Tuesday in Florida, beginning what may prove to be a difficult bid for another four years at the White House.

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The Fed, facing fresh demands from Mr Trump to cut interest rates, is expected to leave borrowing costs unchanged this week but possibly lay the groundwork for a rate cut later this year.

Foreigners were net buyers of 41.0 billion won worth of shares on the main board.

The won was quoted at 1,185.8 per dollar on the onshore settlement platform, 0.06 per cent higher than its previous close at 1,186.5.

In offshore trading, the won was quoted at 1,185.7 per US dollar, unchanged from the previous day, while in non-deliverable forward trading its one-month contract was quoted at 1,184.3 per dollar.

MSCI's broadest index of Asia-Pacific shares outside Japan was up 0.62 per cent, after US stocks closed slightly higher on Monday. Japanese stocks fell 0.72 per cent.

The Kospi has risen 2.83 per cent so far this year, but lost 5.5 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 584.43 million shares and, of the total traded issues of 891, the number of advancing shares was 349.

The won has lost 5.9 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 110.17, while the three-month Certificate of Deposit rate was quoted at 1.80 per cent.

The most liquid three-year Korean treasury bond yield was flat at 1.490 per cent, while the benchmark 10-year yield fell by 1.4 basis points to 1.607 per cent. 

REUTERS