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(LEAD) Seoul stocks close higher on hopes of global stimulus

All News 16:34 May 18, 2020

(ATTN: ADDS bond yields at bottom, photo)

SEOUL, May 18 (Yonhap) -- South Korean stocks closed higher Monday on hopes of global stimulus measures and rising oil prices. The local currency fell against the U.S. dollar amid a renewed trade dispute between the United States and China.

The benchmark Korea Composite Stock Price Index (KOSPI) gained 9.83 points, or 0.51 percent, to close at 1,937.11. Trading volume was moderate at about 752.7 million shares worth some 9.24 trillion won (US$7.49 billion), with losers outnumbering gainers 424 to 423.

An electronic signboard at a Hana Bank dealing room in Seoul shows the benchmark Korea Composite Stock Price Index (KOSPI) closed at 1,937.11 on May 18, 2020, up 9.83 points or 0.51 percent from the previous session's close. (Yonhap)

The index got off to a weak start amid fears of a renewed trade row between the United States and China, prompted by U.S. sanctions on China's tech giant Huawei.

But the local stock market rebounded after investors went on buying undervalued stocks.

Hopes for global stimulus measures, along with a recovery in global oil prices, boosted investor sentiments.

"President Donald Trump is pushing for the so-called 'new deal' ahead of the presidential election that combines massive investment in social infrastructure programs with a minus interest rate," Oh Chang-seop, an economist at Hyundai Motor Securities, said.

"Also, many other countries, including China, Europe and South Korea, have announced massive investment programs to help boost the economy," Oh added.

Dubai crude, South Korea's benchmark, traded 2.11 percent higher at $31.94 per barrel as of 3:35 p.m. while U.S. West Texas Intermediate (WTI) crude futures changed hands at $30.90 per barrel, up 1.47 percent, or $4.99, from the previous session.

Foreign investors sold a net 93.3 billion won, extending their latest selling streak to a sixth consecutive session. Retail investors purchased a net 30.2 billion won while institutions scooped up a net 34.2 billion won.

Large caps closed mixed.

Samsung Electronics, the world's largest supplier of smartphones, spiked 1.99 percent to 48,800 won, while its local rival LG Electronics surged 3.68 percent to 56,400 won.

No. 2 chipmaker SK hynix lost 0.98 percent to 81,100 won while leading automaker Hyundai Motor shed 0.43 percent to 91,900 won.

The local currency closed at 1,232.40 won per dollar, down 1.40 won from the previous session's close.

Bond prices, which move inversely to yields, closed lower. The yield on three-year Treasurys added 1.3 basis points to 0.887 percent, and the return on the benchmark five-year government bond gained 1.0 basis point to 1.128 percent.

bdk@yna.co.kr
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