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Views Article – Sharenet Wealth

Asia, Forex

S.Korea stocks steady; investors eye more stimulus, rate cut

* KOSPI index range-bound, foreigners net buyers * Korean won steady versus U.S. dollar * South Korea benchmark bond yield falls SEOUL, July 16 (Reuters) – Round-up of South Korean financial markets: South Korean shares were muted on Tuesday after China’s second-quarter GDP growth rate turned slowest in 27 years, reinforcing hopes of further stimulus, while the local central bank is due to hold a monetary meeting this week with increasing calls for a rate cut. The Korean won was flat, while the bond yield dropped. ** China’s economic growth slowed to 6.2% in the second quarter, its weakest pace in at least 27 years, as demand at home and abroad faltered in the face of mounting U.S. trade pressure. Monday’s growth data added to expectations that Beijing needs to do more to boost consumption and investment and restore business confidence. ** China is expected to provide more stimulus in the second half of the year and expectations of a rate cut by the Bank of Korea are high, said Cho Byung-hyun, analyst, Yuanta Securities Korea. If the bank cuts rates, it would positively affect the South Korean financial market given the stances of the government and the bank have been far from boosting markets, Cho added. ** Investors bank on increasing bets over a potential rate cut by the Bank of Korea on Thursday with the three-year yield standing firmly below the current policy rate. ** As of 0220 GMT, the Seoul stock market’s main KOSPI was down 0.48 points or 0.02% at 2,082.00 points. ** Foreigners were net buyers of 55.5 billion won ($47.08 million) worth of shares on the main board. ** The won was quoted at 1,180.0 per dollar on the onshore settlement platform , 0.06% lower than its previous close at 1,179.3. ** In offshore trading, the won was quoted at 1,178.3 per U.S. dollar, up 0.1% from the previous session, 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 0.05%, after U.S. stocks climbed. Japanese stocks dropped 0.72%. ** The KOSPI climbed 1.99% so far this year, and gained 2% 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 287.17 million shares and, of the total traded issues of 891, the number of advancing shares was 329. ** The won lost 5.4% against the U.S dollar so far this year. ** In money and debt markets, September futures on three-year treasury bonds rose 0.04 points to 110.53, while the 3-month Certificate of Deposit rate was quoted at 1.78%. ** The most liquid 3-year Korean treasury bond yield fell by 1.4 basis points to 1.419%, while the benchmark 10-year yield dropped by 2.1 basis points to 1.560%. ($1 = 1,178.8200 won) (Reporting by Hayoung Choi, Editing by Sherry Jacob-Phillips)


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