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South Korea: Stocks bounce back; Fed in focus
[SEOUL] South Korean shares climbed on Tuesday recouping some of the previous day's sharp losses, but uncertainties remained high amid a worsening diplomatic and economic spat with Japan, ahead of the US Federal Reserve's policy meeting.
The Seoul stock market's main KOSPI index ended up 9.20 points or 0.45 per cent at 2,038.68.
The benchmark index shed nearly 2 per cent on Monday as tensions with Japan added pressure on the export-dependent economy.
Foreigners were net buyers of US$119.25 million worth of shares on the main board.
The US Fed will begin a two-day policy meeting later in the day, at which it is widely expected to lower interest rates by 25 basis points. If implemented, it would be the central bank's first rate cut in a decade.
Japan is preparing for Cabinet approval as early as Friday to remove South Korea from the so-called white list status with minimum trade restrictions, Japanese media reported last week.
Uncertainty has persisted over the relationship with Japan, said Cho Byung-hyun, an analyst at Yuanta Securities Korea, noting that eyes will now be on developments from the Asean Regional Forum (ARF).
Officials from Seoul and Tokyo will be in Bangkok this week for the ARF. South Korean foreign minister Kang Kyung-wha said she is "highly likely" to meet with Japan's Taro Kono as well as US Secretary of State Mike Pompeo during the ASEAN forum.
Amid a deepening row between neighbours, South Korea's underwear makers surged as South Korean boycott of Japanese clothing brands intensified, making the textile sub-index the biggest percentage gainer among KOSPI sub-indexes with a 2.5% rise.
Shares of Monami jumped as much as 26.2 per cent on Tuesday, before it ended up 12.9 per cent, as investors expected the stationery maker's sales to grow as customers boycott Japanese pens.
The KOSPI has fallen 0.12 per cent so far this year, and lost 2.9 per cent in the previous 30 trading sessions.