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Seoul: Stocks, won recover after China eases foreign investment curbs

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[SEOUL] South Korea's Kospi stock index and the won gained on Friday on eased trade spat between China and the major economies after China decided to improve market access for foreign investors.

The Korean won and bond yields also rose.

At 06.32 GMT, the Kospi was up 11.89 points or 0.51 per cent at 2,326.13, after hitting the lowest intraday level since May 2017. The benchmark stock index fell 4 per cent on a monthly basis.

Samsung BioLogics closed up nearly 2 per cent. It gained as much as 4.8 per cent on the market's open after Biogen said on Thursday it exercised its call option to purchase more shares of a joint venture with Samsung BioLogics.

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South Korea on Friday delayed a decision on whether to cancel the aviation business license of budget airline Jin Air, an affiliate of Korean Air Lines, given the "grave impact" the cancellation will have on the airline industry.

The vice-transport minister said a license cancellation "is very rare" worldwide, and added the ministry will hold a hearing and listen to the views of stakeholders.

Reflecting the uncertainty of the issue, shares of Jin Air fell as much as 3.5 per cent during the day, while those of Korean Air Lines rose 4.4 per cent. 

South Korea's cement producers jumped after the inter-Korean road cooperation talks came to an agreement on Thursday, which includes modernising and connecting cross-border roads. Hyundai Cement surged 26.6 per cent, marking its biggest percentage gain since June 11, while Korea Cement gained 15.1 per cent. 

The won was quoted at 1,114.5 per US dollar on the onshore settlement platform, 0.87 per cent firmer than its previous close at 1,124.2.

For the month, the currency jumped 3.4 per cent against US dollar, marking its biggest monthly gain since October 2016.

In offshore trading, the won was quoted at 1,113.8 per US dollar, up 0.6 per cent from the previous day, while in one-year non-deliverable forwards it was being transacted at 1,097.65 per US dollar.

MSCI's broadest index of Asia-Pacific shares outside Japan was up 1.35 per cent, after US stocks ended the previous session with mild gains. Japanese stocks rose 0.15 per cent.

The Kospi is down around 6.2 per cent so far this year, and down by 6.54 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 389,705,000 shares and, of the total traded issues of 887, the number of advancing shares was 470. 

Foreigners were net buyers of 165,101 million won worth of shares.

The US dollar has risen 4.42 per cent against the won this year.

The won's high for the year is 1,053.55 per US dollar on April 2 and low is 1,125.17 on June 27.

In money and debt markets, September futures on three-year treasury bonds fell 0.04 points to 108.02.

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 2.133 per cent, higher than the previous day's 2.11 per cent.

REUTERS