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South Korea: Shares bounce back from plunge, triggering sidecar limits

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South Korean shares rebounded sharply to surge more than 6 per cent on Tuesday, triggering sidecar limits on the main indexes after extraordinary new support measures from the US Federal Reserve bolstered investor sentiment.

[SEOUL] South Korean shares rebounded sharply to surge more than 6 per cent on Tuesday, triggering sidecar limits on the main indexes after extraordinary new support measures from the US Federal Reserve bolstered investor sentiment.

The South Korean won strengthened, while the benchmark bond yield fell.

As of 02:13 GMT, the Seoul stock market's main KOSPI index rose 93.79 points, or 6.33 per cent, to 1,576.25. It closed 5.11 per cent lower at 1,486.05 the day before.

The Korea Exchange said sidecars were triggered on the benchmark KOSPI and the junior KOSDAQ to halt programme trading for 5 minutes after shares jumped more than 5 per cent each for over a minute.

The US Federal Reserve said on Monday it would backstop an unprecedented range of credit for households, small businesses and major employers to offset the tremendous hardship caused by the coronavirus.

MSCI's broadest index of Asia-Pacific shares outside Japan jumped 3.97 per cent, while Japanese stocks rose 6.37 per cent.

Meanwhile, South Korean President Moon Jae-in said the government will double a planned rescue package to contain mounting economic and financial fallout from the coronavirus to 100 trillion won.

The won was quoted at 1,257.1 per US dollar on the onshore settlement platform , 0.75 per cent higher than its previous close at 1,266.5.

In offshore trading, the won was quoted at 1,257.8 per dollar, up 1.2 per cent from the previous day, while in non-deliverable forward trading its one-month contract was quoted at 1,253.3 per dollar.

The won has lost 8 per cent against the dollar so far this year.

The KOSPI has fallen 28.28 per cent so far this year, and lost 32.6 per cent in the previous 30 trading sessions. The trading volume during the session in the KOSPI index was 331.93 million shares. Of the total traded issues of 902, the number of advancing shares was 854.

In money and debt markets, June futures on three-year treasury bonds rose 0.24 points to 111.02. The most liquid 3-year Korean treasury bond yield fell by 4.4 basis points to 1.105 per cent, while the benchmark 10-year yield fell by 4.7 basis points to 1.662 per cent.

REUTERS

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