(LEAD) Seoul stocks spike 1 pct on hope for U.S.-China trade deal

(ATTN: ADDS bond yields at bottom)

SEOUL, Sept. 4 (Yonhap) -- South Korean stocks rallied 1 percent Wednesday as investors hunted for bargains amid hopes that the United States and China may reach a limited deal. The Korean won rose against the U.S. dollar.

The benchmark Korea Composite Stock Price Index (KOSPI) jumped 22.84 points, or 1.16 percent, to close at 1,988.53. Trade volume was moderate at 342.7 million shares worth 4 trillion won (US$3.3 billion), with gainers outnumbering losers 532 to 273.

Investors scooped up bargains after the index fell sharply in previous sessions in the face of the growing tension between the world's top two economies.

"The growing possibility that the U.S. and China may reach a small-scale deal buoyed investor sentiment," said Seo Sang-young, a researcher at Kiwoom Securities Co.

The increase, however, was limited due to the weak purchasing managers' index (PMI) from the U.S. announced overnight, analysts added.

Investor sentiment also got a boost from news that Hong Kong's beleaguered leader, Carrie Lam, plans to formally withdraw a controversial bill that would have allowed extraditions to China.

Foreigners dumped a net 352 billion won worth of shares to weigh on the overall market. Institutions bought a net 483 billion won, while retail investors offloaded a net 148 billion won.

Market kingpin Samsung Electronics moved up 1.97 percent to 44,100 won, and No. 2 chipmaker SK hynix rose 3.9 percent to 80,000 won. LG Electronics gained 0.65 percent to 62,100 won.

Pharmaceutical firms closed higher, with Celltrion advancing 4.36 percent to 167,000 won and Samsung BioLogics climbing 2.21 percent to 278,000 won. Hanmi Pharmaceutical gained 1.06 percent to 285,000 won.

Chemical shares traded mixed, with No. 1 LG Chem falling 0.16 percent to 321,500 won, while LG Household & Health Care added 0.81 percent to 1,241,000 won.

Asiana Airlines fell 4.51 percent amid its parent firm's efforts to sell stakes in the flight operator, with its subsidiary Air Busan also sliding 2.55 percent to 6,500 won.

The local currency closed at 1,208.20 won against the U.S. dollar, sharply up 7.4 won from the previous session's close.

Bond prices, which move inversely to yields, closed lower. The yield on three-year Treasurys gained 1.3 basis points to 1.241 percent, and the return on the benchmark five-year government bond rose 1 basis point to 1.300 percent.

colin@yna.co.kr
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