Seoul: Won, stocks rise as near-term Fed rate hike seen unlikely

[SEOUL] The South Korean won and shares rebounded early on Thursday as minutes of the US Federal Reserve's June meeting released overnight suggested the Fed will not raise interest rates anytime soon.

The won was quoted at 1,157.3 to the US dollar as of 0242 GMT, up 0.7 per cent compared to the previous close of 1,165.6.

The Korea Composite Stock Price Index (Kospi) was up one per cent at 1,971.91 points, supported by foreign investors that came into the market for bargain-hunting.

Federal Reserve policymakers decided in June that interest rate hikes should stay on hold until they have a handle on the consequences of Brexit, according to the minutes of the Fed's June policy meeting.

"Riskier assets are getting a boost since it is clear now that the Fed will not hike rates in the near term," said Jung Sung Yoon, a foreign exchange analyst at Hyundai Futures.

He added that current market volatility will ease toward the weekend, before US jobs data due late on Friday, but may have a sudden bounce because of ongoing Brexit fears.

Offshore investors were poised to be net buyers, purchasing 84.1 billion Korean won (S$98.2 million) worth of Kospi shares near mid-session, buttressing the index.

Shares of tech giant Samsung Electronics Co Ltd showed only moderate gains after the release of its second-quarter earnings guidance, since expectations were already priced in.

The company said on Thursday its second-quarter operating profit was likely to rise 17.4 per cent from a year earlier, its highest in more than two years as Galaxy S7 smartphone sales drove mobile earnings.

Screenmaker LG Display Co Ltd gained 3.2 per cent.

Advancers outnumbered decliners 597 to 201.

September futures on three-year treasury bonds shed 0.02 point to 111.14.

REUTERS