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Market rebounds on hopes for China stimulus

Feb 12,2020
Stocks closed sharply higher Tuesday, snapping a two-day losing streak on U.S. indicators signaling steady economic improvements, with China expected to take stimulus measures to minimize the fallout from the coronavirus outbreak. The local currency rose against the dollar.

The Kospi jumped 22.05 points, or 1 percent, to close at 2,223.12. Trading volume was moderate at 510 million shares worth 6.47 trillion won ($5.47 billion), with gainers outnumbering losers 568 to 281.

“Despite the spread of the coronavirus, the New York stock market continued to rise reaching a record high on the news of China lowering its import tariffs on U.S. goods under its first phase trade deal with the United States,” Hana Financial Investment analyst Kim Hoon-gil said.

On Wall Street, the Dow Jones industrial average shot up 0.6 percent to close at a record 29,276.82 Monday.

China’s widely anticipated stimulus measures also boosted investor sentiment across Asia.

“The reason China’s stock prices are rising despite the continued spread of the coronavirus is because the market expects bold fiscal measures by the Chinese government following the injection of massive liquidity by the People’s Bank of China last week,” said NH Futures analyst So Byeong-eun.

Foreigners continued to sell shares for two consecutive sessions, offloading a net 94.2 billion won. Individuals dumped a net 220 billion won, while institutions scooped up a net 301 billion won.

Most large caps closed in positive terrain.

Samsung Electronics added 0.34 percent to 59,900 won, while chipmaker SK hynix jumped 1.01 percent to 99,800 won.

Automaker Hyundai Motor surged 1.92 percent, with its smaller affiliate Kia Motors soaring 1.72 percent. Hyundai Mobis added 3.94 percent to close at 237,500 won.

Shares of OCI Company surged by 11.88 percent despite negative earnings results announced Tuesday. The chemical company announced it would move production of poly-silicon materials for solar panels from Gunsan, North Jeolla, to a factory in Malaysia to cut costs.

The Korean won closed at 1,181.55 won per dollar, down 5.55 won from the previous session’s close.

The Kosdaq was up 6.27 points, or 0.93 percent, to close at 682.34.

Bond prices, which move inversely to yields, closed mixed. The yield on three-year bonds added 0.5 basis points to 1.301 percent, while the return on the benchmark 10-year government bond lost 0.9 basis points to reach 1.57 percent.

BY KANG JAE-EUN [kang.jaeeun@joongang.co.kr]