Seoul: Stocks, won rise on dovish Fed comments; BOK rate call awaited

[SEOUL] South Korea's Kospi stock index and the won both rose on Thursday as dovish comments from Federal Reserve Chair Jerome Powell boosted investor sentiment towards riskier assets. South Korean bond yields fell.

South Korea's central bank is highly expected to raise rates at its monetary policy meeting on Friday, according to a Reuters Poll.

The Kospi closed up 5.87 points, or 0.28 per cent, at 2,114.09, extending its gains into a fourth session.

"Dovish remarks from chairman Powell buoyed the market, however it wasn't strong enough to maintain gains from earlier during the day," said Lee Won, an analyst at Bookook Securities.

"Investors are taking a wait-and-see stance ahead of tomorrow's highly expected rate hike decision, which is not a favourable result to the Kospi market."

Shares of Celltrion, South Korea's largest drugmaker, climbed more than 3 per cent during the day on the U.S. Food and Drug Administration's approval for its biosimilar to Roche Holding's US$7-billion-per-year cancer drug Rituxan.

The won was quoted at 1,119.2 per dollar on the onshore settlement platform, 0.65 per cent firmer than its previous close at 1,126.5. The currency posted the biggest daily gain since Nov 2.

In offshore trading, the won was quoted at 1,119.64 per US dollar, up 0.25 per cent from the previous day, while in one-year non-deliverable forwards it was being transacted at 1,098.2 per dollar.

MSCI's broadest index of Asia-Pacific shares outside Japan was up 0.61 per cent, after US stocks ended the previous session with gains. Japanese stocks rose 0.39 per cent.

The Kospi is down around 14.6 per cent so far this year, and up by 2.74 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 300,383,000 shares and, of the total traded issues of 892, the number of advancing shares was 456.

Foreigners were net buyers of 325,148 million won worth of shares.

The US dollar has risen 5 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 1,146.26 on Oct 11, 2018.

In money and debt markets, December futures on three-year treasury bonds rose 0.1 point to 108.98.

The South Korean three-month Certificate of Deposit benchmark rate was quoted at 1.7 per cent, while the benchmark three-year Korean treasury bond yielded 1.89 per cent, lower than the previous day's 1.93 per cent.

REUTERS