South Korea: Stocks end higher amid optimism over US plans to reopen economy

[SEOUL] South Korean shares closed more than 3 per cent higher on Friday, its sharpest gain in over a week, as optimism over reopening of the American economy outweighed worries over Chinese GDP data that showed a historic contraction.

The won strengthened and the benchmark bond yield rose.

The Kospi closed up 57.37 points, or 3.1 per cent, at 1,914.44. The index rose 2.9 per cent for the week, its fourth straight weekly gain, although it is down 12.9 per cent for the year so far.

Stock prices rose as investors cheered news of US economy re-opening as well as a drug development for the coronavirus treatment, although some gains were erased after China's GDP data for the first quarter came in worse than expected, said Seo Sang-young, an analyst at Kiwoom Securities.

US President Donald Trump laid out new guidelines for states to emerge from a coronavirus shutdown in a staggered, three-stage approach.

China's economy shrank for the first time in almost three decades of records during the first quarter, as the coronavirus paralysed production and spending.

South Korea, which reported 22 new cases, saw its unemployment rate rising only modestly in March, but the workforce participation rate posted the steepest decline since 2009 as demand for labour plunged.

Foreigners were net buyers of 398.2 billion won (US$327.38 million) worth of shares on the mainboard, snapping 30 straight sessions of sell-offs.

The won closed trading at 1,217.9 per dollar on the onshore settlement platform, 0.9 per cent higher than its previous close at 1,228.7.

In offshore trading, the won was quoted at 1,217.8 per dollar, up 0.9 per cent from the previous day, while in non-deliverable forward trading, its one-month contract was quoted at 1,215.6. The trading volume was 1,643.89 million shares. Of the total traded issues of 902, the number of advancing shares was 724.

The won has lost 5 per cent against the dollar so far this year.

In money and debt markets, June futures on three-year treasury bonds fell 0.06 point to 111.61.

The most liquid 3-year Korean treasury bond yield rose by 2.6 basis points to 1.005 per cent, while the benchmark 10-year yield rose by 3.2 basis points to 1.440 per cent. (US$1 = 1,216.3100 won)

REUTERS