South Korea stocks bounce back; Fed in focus

SEOUL: Round-up of South Korean financial markets:

** 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 U.S. Federal Reserve's policy meeting. The Korean won strengthened, while the benchmark bond yield fell.

** The U.S. 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 U.S. 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% on Tuesday, before it ended up 12.9%, as investors expected the stationery maker's sales to grow as customers boycott Japanese pens.

** Shares of Dual Industrial tumbled nearly 30% after the auto parts maker dropped its bid to buy a stake in SG BKGroup, owner of South Korea's leading virtual currency exchange Bithumb.

** The Seoul stock market's main KOSPI index ended up 9.20 points or 0.45% at 2,038.68.

** The benchmark index shed nearly 2% on Monday as tensions with Japan added pressure on the export-dependent economy.

** Foreigners were net buyers of 140.9 billion won ($119.25 million) worth of shares on the main board.

** The won was quoted at 1,181.6 per dollar on the onshore settlement platform, 0.16% higher than its previous close at 1,183.5.

** In offshore trading, the won was quoted at 1,181.6 per U.S. dollar, up 0.1% from the previous day, while in non-deliverable forward trading its one-month contract  was quoted at 1,180.4 per dollar.

** MSCI's broadest index of Asia-Pacific shares outside Japan  was up 0.20%, after U.S. stocks stepped back from last week's record highs. Japanese stocks  rose 0.43%.

** The KOSPI has fallen 0.12% so far this year, and lost 2.9% in the previous 30 trading sessions.

** The current price-to-earnings ratio is 12.10, the dividend yield is 1.28% and the market capitalisation is 1,242.04 trillion won.

** The trading volume during the session on the KOSPI index  was 538.76 million shares and, of the total traded issues of 891, the number of advancing shares was 584.

** The won has lost 5.6% against the U.S dollar so far this year.

** In money and debt markets, September futures on three-year treasury bonds rose 0.03 point to 110.85, while the 3-month Certificate of Deposit rate was quoted at 1.52%.

** The most liquid 3-year Korean treasury bond yield fell by 0.9 basis points to 1.296%, while the benchmark 10-year yield fell by 0.9 basis points to 1.399%.