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South Korea: Stocks, won rebound as US shelves talk of scuttling trade deal
[SEOUL] South Korean shares looked set to break a five-day losing streak on Thursday and the won climbed after the White House said it was suspending internal discussions about terminating the US trade agreement with Seoul.
The announcement overshadowed market concerns about the additional deployment of the US anti-missile Thaad system amid growing provocations by North Korea, including a powerful nuclear test on Sunday.
The Korea Composite Stock Price Index (Kospi) was up 1.1 per cent at 2,345.63 points as of 0228 GMT.
The South Korean won rose 0.5 per cent to 1,129.4 to the dollar, from Wednesday's close of 1,135.4.
"North Korea risks are still there but the markets seem to be responding more to positive issues like comments from Washington about the FTA with South Korea (Free Trade Agreement)," said Cho Byung Hyun, a stock analyst at Yuanta Securities.
President Donald Trump warned on Wednesday that the United States would no longer tolerate North Korea's actions but said the use of military force against Pyongyang will not be his"first choice."
Mr Trump had been discussing pulling the plug on the trade deal with South Korea out of concern that it was tilted against the United States, but needs Seoul fully onside as he tries to resolve the North Korean crisis.
Despite lingering risks in the peninsula, offshore investors turned to net buyers, adding a net 54.5 billion won (S$65.1 million) worth of Kospi shares to their portfolios near mid-session, after selling 546.1 billion won worth of in the past two days.
Mr Cho said foreign investors were mainly focusing on tech and banking sectors where they expect strong earnings for the third-quarter.
The sub-index for electric and electronic shares rose nearly 2 per cent. Tech giant Samsung Electronics was up 2.1 per cent while SK Hynix gained 1.3 per cent.
Major financial shares climbed 1.4 per cent with Shinhan Financial Group up over 2 per cent.
Advancing issues far outnumbered declining ones 549 to 229.
September futures on three-year treasury bonds lost 0.01 point to 109.23.