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Seoul: Stocks, won strengthen after Powell comments
[SEOUL] South Korea's KOSPI stock index and the currency won rose on Monday taking heart from comments by the Federal Reserve chairman Powell that drove Wall Street to record highs on Friday. South Korean bond yields also rose.
The Federal Reserve's chairman Jerome Powell said on Friday that steady interest rate hikes are the best way to protect the U.S. economic recovery and keep job growth as strong as possible and inflation under control, in a high-profile endorsement of the central bank's current approach to policy. At 0630 GMT, the KOSPI was up 6.09 points or 0.27 per cent at 2,299.30.
South Korean firms with exposure to North Korea, including Hanil Hyundai Cement and Busan Industrial Co Ltd closed down 14.4 per cent and 10.1 per cent, respectively, after U.S. President Donald Trump called off Mike Pompeo's trip to North Korea on Friday, saying the two countries were not making sufficient progress on denuclearisation. The won was quoted at 1,113.8 per dollar on the onshore settlement platform, 0.46 per cent firmer than its previous close at 1,118.9.
In offshore trading, the won was quoted at 1,113.74 per U.S. dollar, up 0.05 per cent from the previous day, while in one-year non-deliverable forwards it was being transacted at 1,097.65 per dollar. MSCI's broadest index of Asia-Pacific shares outside Japan rose 1.10 per cent after U.S. stocks ended the previous session with mild gains. Japanese stocks rose 0.88 per cent. ** The KOSPI is down around 7.1 per cent so far this year, and up by 0.36 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 300,061,000 shares, and of the total traded issues of 898, the number of advancing shares was 328.
Foreigners were net buyers of 235,399 million won worth of shares. The US dollar has risen 4.44 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 1,140.4 on July 19 2018. In money and debt markets, September futures on three-year treasury bonds fell 0.02 points to 108.68. 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 1.967 per cent, higher than the previous day's 1.97 per cent.