South Korean stocks rise as rate cut bets remain high

23 Jul, 2019

** South Korean shares ended firmer on Tuesday as rising bets on policy easing by major central banks shifted investors' focus to high-yield dividend stocks, lifting finance and securities firms. The won weakened slightly, while the benchmark bond yield rose.

** South Korea's central bank chief suggested he was ready to cut the policy interest rate further by saying that he does not rule out a situation requiring more policy response after last week's rate cut.

** Expectations that the European Central Bank and the U.S. Federal Reserve will cut interest rates boosted stocks globally.

** Due to rising expectations of interest rate cuts, investors eyed high-yield dividend stocks such as securities companies and oil companies, said Cho Byung-hyun, an analyst at Yuanta Securities Korea. As a trade dispute between South Korea and Japan develops, worries about a glut in memory chip supply  eased, boosting South Korean chipmakers, he added.

** The major finance sub-index and the minor securities sub-index rallied 1% and 0.9%, respectively. Shares of S-Oil and SK Innovation jumped more than 2% each.

** South Korea's SK Hynix gained nearly 3% before trimming its gains. Its shares closed up 0.5%, rising 13.38% so far this month.

** The Seoul stock market's main KOSPI index closed up 8.11 points, or 0.39%, at 2,101.45 points.

** South Korea's economy probably returned to growth in the second quarter after a surprising contraction in the first, helped mainly by government spending, a Reuters poll found.

** Foreigners were net buyers of 287.2 billion won ($243.64 million) worth of shares on the main board.

** The won was quoted at 1,178.9 per dollar on the onshore settlement platform, 0.05% lower than its previous close at 1,178.3.

** In offshore trading, the won was quoted at 1,178.9 per U.S. dollar, down 0.3% from the previous day, while in non-deliverable forward trading its one-month contract  was quoted at 1,176.8 per dollar.

** MSCI's broadest index of Asia-Pacific shares outside Japan  was up 0.12%, after U.S. stocks gained . Japanese stocks rose 0.95%.

** The KOSPI has risen 2.96% so far this year, but lost 0.3% 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 640.01 million shares and, of the total traded issues of 895, the number of advancing shares was 289.

** The won has lost 5.4% against the U.S dollar so far this year.

** In money and debt markets, September futures on three-year treasury bonds fell 0.01 points to 110.74, while the 3-month Certificate of Deposit rate was quoted at 1.59%.

** The most liquid 3-year Korean treasury bond yield rose by 0.3 basis point to 1.337%, while the benchmark 10-year yield rose by 0.3 basis point to 1.468%.

Copyright Reuters, 2019

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