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Seoul: Stocks, won rise on relief over trade talks; China to step up stimulus
[SEOUL] South Korea's Kospi stock index and the currency won rose on Wednesday, cheered by reports US and China will move ahead with trade talks and China will step up stimulus measures to support its economy, while tensions including over Huawei capped gains. South Korean bond yields fell.
White House economic adviser Larry Kudlow denied reports that a preliminary trade meeting between U.S. and Chinese officials was cancelled, calming the market over fresh concerns about US-China relations.
China will step up fiscal spending this year to support its economy, focusing on further cuts in taxes and fees for small firms, finance ministry officials said on Wednesday.
The government may unveil more fiscal stimulus during the annual parliamentary meeting in March, including bigger tax cuts and more spending on infrastructure projects, economists say.
The US Justice Department said on Tuesday it will pursue the extradition of the chief financial officer of China's Huawei Technologies Co Ltd's, arrested in Canada in December.
The US statement came a day after a report that Canada's ambassador to the United States said his government was told Washington planned to proceed.
The Kospi ended up 10.01 points or 0.47 per cent at 2,127.78.
South Korea's Kospi rose, towed by reports that China is considering buying wheat from the United States, while China is expected to step up its stimulus to support the economy, said Seo Sang-young, an analyst at Kiwoom Securities.
However, cautions over U.S.-China trade negotiations are persisting, Seo added.
Bloomberg reported that China is said to consider buying up to 7 million tonnes of wheat from the United States.
Hanwha AeroSpace said it won order worth $1.7 billion from U.S. aerospace firm Pratt & Whitney to supply engine parts, sending its shares up 2.7 per cent.
Shares of Hanmi Pharm dropped 2.9 per cent after the company said its partner company Eli Lilly and Co decided to return exclusive licence of the arthritis drug to Hanmi Pharm after reviewing trial data and the drug market in January.
After the South Korean market closed, Samsung C&T said its 2018 fourth-quarter operating profit fell 14.3 per cent from same period a year ago, while it targets new orders worth 117 trillion won ($103.79 billion).
The won was quoted at 1,127.3 per dollar on the onshore settlement platform, 0.28 per cent firmer than its previous close at 1,130.5.
In offshore trading, the won was quoted at 1,127.79 per U.S. dollar, up 0.26 per cent from the previous day, while in one-year non-deliverable forwards it was being transacted at 1,109.4 per dollar.
MSCI's broadest index of Asia-Pacific shares outside Japan was down 0.05 per cent, after U.S. stocks ended the previous session with mild losses. Japanese stocks weakened 0.14 per cent.
The Kospi is up around 3.8 per cent so far this year, and up by 2.37 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 401,771,000 shares and, of the total traded issues of 897, the number of advancing shares was 524.
Foreigners were net sellers of 173,770 million won worth of shares.
The U.S dollar has risen 1.3 per cent against the won this year. The won's high for the year is 1,113.81 per dollar on Jan. 11 and the low is 1,133.4 on Jan. 21.
In money and debt markets, March futures on three-year treasury bonds was steady at 109.3.
** The Korean 3-month Certificate of Deposit benchmark rate was quoted at 1.86 per cent, while the benchmark 3-year Korean treasury bond yielded 1.804 per cent, lower than the previous day's 1.81 per cent. (Reporting by Joori Roh; Editing by Shreejay Sinha)