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(LEAD) Seoul stocks spike 1.3 pct on reduced chance of U.S. rate hikes

All News 15:47 June 07, 2016

(ATTN: ADDS bond yields at bottom)

SEOUL, June 7 (Yonhap) -- South Korean stocks soared to surpass the 2,000-point mark on Tuesday as weaker than expected job data in the U.S. reduced the chance of an imminent rate hike in the world's largest economy. The Korean won sharply rose against the U.S. dollar.

The benchmark Korea Composite Stock Price Index (KOSPI) jumped 25.79 points, or 1.3 percent, to close at 2,011.63. Trade volume was thin at 472 million shares worth 5.46 trillion won (US$4.69 billion), with losers outnumbering winners 506 to 307.

The local stock market opened strong as U.S. job data for May has diminished the possibility of a June rate hike by the Federal Reserve.

"A shock was brought to the market as the U.S. created only 38,000 new jobs, far below the expectation of payroll growth of some 160,000," said So Jae-yong, an analyst at Hana Financial Investment. "There is a very slim possibility of the U.S. raising its key rate at the upcoming Federal Open Market Committee meeting in June."

Samsung Electronics, the country's top market cap, rose for the fifth consecutive day to end at 1,398,000 won, up 1.53 percent from the previous day's close.

Leading steelmaker POSCO jumped 6.9 percent to 217,000 won, while state-run utility firm Korea Electric Power Corp. (KEPCO) slipped 0.17 percent to 60,000 won.

Samsung SDS, a key IT affiliate of the country's No. 1 conglomerate Samsung Group, also soared 6.28 percent to 118,500 won on the back of an announcement that the company is considering splitting off its logistics business.

The local currency closed at 1,162.7 won against the U.S. dollar, sharply up 20.9 won from the previous session's close.

Bond prices, which move inversely to yields, closed higher. The yield on three-year Treasury fell 1.8 basis points at 1.405 percent, and the return on the benchmark five-year government bond shed 1.9 basis points to 1.494 percent.


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