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Seoul: Stocks, won gain ahead of rate decision, US data

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[SEOUL] South Korea's Kospi stock index closed up on Tuesday ahead of US retail sales and industrial output data, and the Bank of Korea's rate decision during the week. The South Korean won ticked up, while the benchmark bond yields fell.

The Seoul stock market's main Kospi ended 9.39 points or 0.45 per cent higher to 2,091.87 points.

"Investors are taking a wait-and-see stance ahead of second-quarter earnings results and the Bank of Korea's rate decision on Thursday," said Lee Kyoung-min, analyst at Daishin Securities.

While markets await the US data, a weak data could support the Federal Reserve's rate cut, but if it turns out worse-than-expected, it could spur worries of slowing economy, he added.

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China's economic growth in the second quarter slowed to its weakest pace in at least 27 years, calling for a further stimulus.

South Korea's central bank will likely keep its policy interest rate steady this week but cut rates next month as economic growth falters in Asia's fourth-largest economy, a Reuters poll showed. A majority - 25 of 36 analysts - project a rate reduction between July and August.

Foreigners were net buyers of 251.4 billion won (S$289.5 million) worth of shares on the main board. The won was quoted at 1,177.6 per dollar on the onshore settlement platform, 0.14 per cent higher than its previous close at 1,179.3.

In offshore trading, the won was quoted at 1,177.6 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 1,176.5 per dollar.

MSCI's broadest index of Asia-Pacific shares outside Japan was up 0.20 per cent, after US stocks. Japanese stocks fell 0.69 per cent.

The Kospi has risen 2.49 per cent so far this year, and/but gained 2.0 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.

Trading volume during the session on the Kospi index was 674.50 million and, of the total traded issues of 894, the number of advancing shares was 380.

The won has lost 5.3 per cent against the dollar so far this year.

In money and debt markets, September futures on three-year treasury bonds fell 0.01 point to 110.48, while the three-month Certificate of Deposit rate was quoted at 1.78 per cent.

The most liquid three-year Korean treasury bond yield rose by 0.2 basis point to 1.435 per cent, while the benchmark 10-year yield fell by 0.3 basis point to 1.578 per cent. 

REUTERS