Seoul: Stocks, won recoup losses as Xi's speech eases trade jitters

[SEOUL] South Korean stocks and the won recouped earlier losses and ended firmer on Tuesday after a speech by Chinese President Xi Jinping eased market worries over an escalating US-China trade dispute.

Mr Xi, in a speech to the Boao forum, promised to open China's economy further and lower import tariffs on products including cars while sharply widening market access for foreign investors.

While most of the pledges were reiterations of long-promised measures and were short on specifics, markets believed they signalled some room for a possible compromise that could avert the risk of a full-blown trade war.

The Korea Composite Stock Price Index (KOSPI) closed up 0.3 per cent at 2,450.74 points.

The South Korean won closed at 1,066.4 against the dollar, 0.1 per cent up versus Monday's close of 1,067.1.

Shares with significant exposure to China posted solid gains.

Lotte Shopping and Hotel Shilla rose 2 per cent and 2.4 per cent, respectively. Cosmetics shares also gained, with Amorepacific up 1.3 per cent and LG Household & Healthcare rising 3.2 per cent.

South Korea's KOSPI stock index rose on Tuesday. The Korean won was slightly higher and bond yields also rose. At 0630 GMT, the KOSPI was up 6.66 points or 0.27 per cent at 2,450.74.

The won was quoted at 1,066.4 per dollar on the onshore settlement platform, 0.07 per cent firmer than its previous close at 1,067.1. In offshore trading, the won was quoted at 1,065.01 per US dollar, up 0.35 per cent from the previous day, while in one-year non-deliverable forwards it was being asked at 1,051.15 per dollar.

MSCI's broadest index of Asia-Pacific shares outside Japan was up 0.89 per cent, after US stocks ended the previous session with mild gains. Japanese stocks rose 0.54 per cent. The KOSPI is down around 0.9 per cent so far this year, and down by 0.30 per cent in the previous 30 days.

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 352,614,000 shares, and of the total traded issues of 887, the number of advancing shares was 355.

Foreigners were net sellers of 119,717 million won worth of shares. The US dollar has fallen 0.13 per cent against the won this year. The won's high for the year is 1,053.55 per dollar on April 2 2018 and low is 1,098.4 on February 6 2018.

In money and debt markets, June futures on three-year treasury bonds fell 0.05 points to 107.82. The Korean three-month Certificate of Deposit benchmark rate was quoted at 1.65 per cent, while the benchmark three-year Korean treasury bond yielded 2.186 per cent, higher than the previous day's 2.17 per cent.

REUTERS