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Fed move keeps the rally rolling for 10th day

Sept 20,2019
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Stocks ended higher Thursday, extending the winning streak to a 10th day, as the U.S. Federal Reserve’s rate cut and hopes for progress in upcoming U.S.-China trade talks boosted market sentiment. The won fell against the dollar.

After choppy trading, the benchmark Kospi rose 9.62 points, or 0.46 percent, to close at 2,080.35. Trade volume was moderate at 484 million shares worth 4.6 trillion won ($3.9 billion), with losers outnumbering winners 473 to 340.

The Federal Reserve’s rate cut, by 25 basis points to a target range of 1.75 to 2.0 percent, propelled the Kospi index higher, and Saudi Arabia’s rapid recovery efforts helped ease concerns over oil supply in the aftermath of attacks on crude production facilities, analysts said.

“Focus is now on the U.S.-China trade negotiations that are expected to resume in the coming weeks. As a working-level meeting is scheduled from Sept. 19-20, investors will be closely watching for any cues from the meeting,” Kiwoom Securities analyst Suh Sang-young said.

Foreigners bought a net 217 billion won worth of stocks, offsetting institutions and individual stock selling.

Technology stocks led market gains, with Samsung Electronics jumping 3.0 percent to 49,150 won, chipmaker SK Hynix climbing 3.1 percent to 82,700 won, Samsung SDI advancing 0.9 percent to 236,500 won and LG Display gaining 2.4 percent to 14,700 won.

In particular, chipmakers continued to strengthen, helped by rising chip demand and declining stockpiles of dynamic random access memory (DRAM) and NAND flash memory chips, mainly used in computers and smartphones to process and store data.

Kia Motors fell 0.7 percent to 43,550 won, and the country’s biggest auto parts maker Hyundai Mobis declined 1.6 percent to 245,500 won. Posco shed 1.9 percent to 233,500 won.

Refiners traded lower following the previous session’s gain. SK Innovation moved down 0.29 percent to end at 169,000 won and S-Oil, the third-largest oil refiner, lost 0.30 percent to end at 99,700 won.

The secondary Kosdaq rose 0.59 points, or 0.09 percent, to close at 645.71.

The local currency closed at 1,193.60 won against dollar, up 2.30 won from the previous session.

Bond prices, which move inversely to yields, were mixed. The yield on three-year bonds added 1.9 basis points to 1.329 percent, and the yield on 10-year bonds dropped 0.6 basis points to 1.79 percent.

BY KIM BYUNG-WOOK, YONHAP [kim.byungwook@joongang.co.kr]