Views Article – Sharenet Wealth

Asia, Forex

S.Korea stocks gain nearly 1% as Fed reinforces rate-cut bets

* KOSPI index picks up, foreigners net buyers * Korean won strengthens versus U.S. dollar * South Korea benchmark bond yield remains unchanged SEOUL, July 19 (Reuters) – Round-up of South Korean financial markets: South Korean shares rose nearly 1% on Friday after a top Federal Reserve official’s comment cemented rate-cut expectations, while chipmakers gained on robust outlook by Taiwan’s TSMC . The Korean won gained, while benchmark bond yield was steady. ** Policymakers need to add stimulus early to deal with too-low inflation when interest rates are near zero and cannot wait for economic disaster to unfold, New York Fed President John Williams said on Thursday. ** The comments by Williams made it a virtual certainty the Fed would opt to cut interest rates by 25 basis points (bps) at its July 30-31 policy meeting and also fuelled expectations of an even deeper 50 bp reduction. ** Taiwan’s TSMC forecast that robust demand for 5G chips will drive a stronger second-half even as it anticipates a dispute between Japan and South Korea involving chip-making materials to be a big source of uncertainty. ** Such news could improve investor sentiment over the country’s chip industry and positively affect its financial market, said Seo Sang-young, analyst, Kiwoom Securities. ** Shares of Samsung Electronics and SK Hynix added 1.5% and 1.7%, respectively, triggering a 1.4% gain in the electric sub-index . ** As of 0149 GMT, the Seoul stock market’s main KOSPI index was up 19.20 points or 0.93% at 2,085.75 points. ** Tensions remained high between South Korea and Japan. South Korea’s Trade Ministry urged Japan to accept its request for another round of talks over Tokyo’s tighter export controls, which are seen threatening global microchip and smartphone display supply chains. ** Japanese Foreign Minister Taro Kono plans to summon South Korea’s ambassador on Friday in a deepening row over compensation for Korean forced labourers in the World War II ear, Japanese public broadcaster NHK reported. ** Foreigners were net buyers of 47.2 billion won ($40.24 million) worth of shares on the main board. ** The won was quoted at 1,174.0 per dollar on the onshore settlement platform , 0.41% higher than its previous close at 1,178.8. ** In offshore trading, the won was quoted at 1,173.1 per U.S. dollar, down 0.1% from the previous session, while in non-deliverable forward trading its one-month contract was quoted at 1,171.3 per dollar. ** MSCI’s broadest index of Asia-Pacific shares outside Japan was up 0.68%, after U.S. stocks climbed. Japanese stocks rose 1.41%. ** The KOSPI climbed 1.83% so far this year, but lost 0.1% 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 148.25 million shares and, of the total traded issues of 892, the number of advancing shares was 536. ** The won lost 5% against the U.S dollar so far this year. ** In money and debt markets, September futures on three-year treasury bonds rose 0.05 points to 110.79, while the 3-month Certificate of Deposit rate was quoted at 1.61%. ** The most liquid 3-year Korean treasury bond yield fell by 0.1 basis points to 1.341%, while the benchmark 10-year yield was flat at 1.470%. ($1 = 1,172.8200 won) (Reporting by Hayoung Choi, Editing by Sherry Jacob-Phillips)

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