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Seoul: Stocks up on rising risk appetite after Fed, won slips
[SEOUL] South Korean shares rose on Thursday morning as risk taking got a boost after the US Federal Reserve signalled further rate rises would be gradual, but gains were capped by foreign selling.
The Korea Composite Stock Price Index (KOSPI) was up 0.4 per cent at 1,978.00 points as of 0239 GMT, set to extend gains into a third day. Advancing issues outnumbered declining ones by 2-to-1.
The Federal Reserve raised its benchmark interest rate by a quarter percentage point for the first time in nearly a decade on Wednesday, citing the ongoing US recovery. The central bank made clear the hike was a tentative beginning to a "gradual"tightening cycle.
On Thursday, South Korea's vice finance minister said the impact from the Fed's rate hike was expected to be limited on the country's economy.
"Despite all the good news from the US, South Korea still faces a foreign stock outflow issue since its open economy is vulnerable to foreign shocks," said Park Seok-hyun, a stock analyst at Eugene Investment & Securities.
Stocks were mixed in early trade. The sub-index for banking shares slid 1.5 per cent, with Shinhan Financial Group Co Ltd losing 1.2 per cent.
Airline shares rose as oil prices extended their decline after a brief respite in the prior session. Asiana Airlines Inc leapt 7.1 per cent and Korean Air Lines Co Ltd rose 3.8 per cent.
Offshore investors dumped a net 40.5 billion won (S$48.58 million) worth of KOSPI shares near the mid-session, set to be net sellers for a 12th consecutive session.
The South Korean won was quoted at 1,179.9 to the dollar, down 0.3 per cent compared with 1,176.2 seen at the end of Wednesday's session.
"Investors are wary of intervention around 1,180 level by foreign exchange authorities (to curb the won's sharp fall),"said Park Yuna, a foreign-exchange analyst at Dongbu Securities.