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Local stocks gain as U.S. Fed takes center stage

Dec 20,2018
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Korean stocks closed higher on Wednesday on institutional buying as investor attention focused on the U.S. Federal Reserve’s rate-setting meeting. The Korean won appreciated against the U.S. dollar.

The benchmark Kospi rose 16.73 points, or 0.81 percent, to 2,078.84. Trading volume was moderate at 412.55 million shares worth 5.02 trillion won ($4.46 billion).

“The government’s stimulus package for the domestic economy and the possibility of the Federal Reserve taking a more dovish tone seem to have lifted investor sentiment here,” said Ryu Yong-seok, an analyst at KB Investment & Securities.

The index rebounded from the previous session’s slump as institutions scooped up a net 255.2 billion won worth of local shares. Foreigners shifted into net buying before the market’s close, picking up a net 8.9 billion won in shares. Retail investors, on the other hand, sold a net 255.50 billion won worth of shares.

Tech shares were mixed.

Market bellwether Samsung Electronics edged up 0.51 percent to 39,100 won, while chipmaker SK Hynix shed 1.31 percent to 60,300 won.

Auto shares rallied after the government announced a set of measures to support the sluggish industry, including the extension of a consumption tax break on new car purchases until July 2019.

Leading automaker Hyundai Motor rose 4.24 percent to 123,000 won, and its parts maker Hyundai Mobis picked up 2.75 percent to 205,500 won. Kia Motors ended 0.30 percent higher at 33,800 won.

Bio shares were also among winners in the session, as pharmaceutical giant Celltrion rose 3.20 percent to 225,500 won and Samsung BioLogics edged 0.41 percent higher to 368,000 won. Chemical industry leader LG Chem rose 3.68 percent to 352,500 won. Leading steelmaker Posco also ended the session 0.79 percent higher to 255,000 won.

Shipbuilders slumped as Hyundai Heavy Industries declined 2.92 percent to 133,000 won and Daewoo Shipbuilding & Marine Engineering tumbled 6.86 percent to 34,600 won.

The secondary Kosdaq also ended higher, gaining 12.41 points or 1.88 percent, to end the session at 672.08. The tech and bio-heavy index was lifted by a 0.45 percent rise in the U.S. Nasdaq Composite Index overnight.

The Korean won closed at 1,123.50 won against the greenback, down 6.10 won from the previous session’s close. Bond prices ended higher. The yield on three-year bonds fell 1.2 basis points to 1.78 percent and the return on 10-year bonds lost 4.9 basis points to 1.93 percent.


BY CHAE YUN-HWAN, YONHAP [chae.yunhwan@joongang.co.kr]