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Seoul stocks buoyed by optimism over summit

June 06,2018
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Korean shares ended higher Tuesday as construction and casinos gained on hopes of cross-border development projects in North Korea ahead of a U.S.-North Korea summit next week, analysts said.

The benchmark Kospi moved up 6 points, or 0.25 percent, to close at 2,453.76.

Trade volume was moderate at 485.33 million shares worth 6.91 trillion won ($6.45 billion), with losers slightly outnumbering gainers 409 to 401.

The local bourse initially lost ground in early trading but rebounded late in the afternoon as foreigners and retail investors jumped in to buy shares.

“The index got a boost from foreign buying as Wall Street gains lifted investor sentiment,” Cho Byung-hyun, an analyst at Yuanta Securities, said. “But the gains were limited as concerns remain over the trade dispute between the United States and China.”

Retail investors bought a net 91.5 billion won and foreigners, 21.9 billion won worth of shares. Institutions dumped 130.1 billion won worth of stocks more than they bought.

Construction advanced on hopes for a revival of projects in the North after the White House announced that U.S. President Donald Trump will meet with North Korean leader Kim Jong-un in Singapore on June 12.

Hyundai Engineering & Construction rose a solid 4.86 percent to 71,200 won, and Daewoo Engineering & Construction picked up 5.66 percent to 6,530 won.

Casino shares rallied after local media reported that Kim Jong-un has asked for U.S. investment in a casino in Wonsan on the North’s eastern coast.

The state-run casino operator Grand Korea Leisure jumped 6.52 percent to 28,600 won, and its smaller rival Paradise Group vaulted 5.84 percent to 19,950 won.

Tech shares were mixed with market bellwether Samsung Electronics edging down 0.39 percent to 51,300 won, and chip giant SK Hynix advancing 1.34 percent to 91,000 won.

Auto shares were down as Hyundai Motor retreated 0.35 percent to 142,500 won, and its corporate cousin Kia Motors fell 1.93 percent to 33,100 won.

Train manufacturer Hyundai Rotem dipped 4.19 percent to 38,850 won to take a breather from a strong rally.

The Korean currency closed at 1,070.7 won against the U.S. dollar, down 1.2 won from the previous session’s close.

Bond prices, which move inversely to yields, ended higher. The yield on three-year government bonds decreased one basis point to 2.2 percent, and the return on 10-year government bonds lost two basis points to 2.72 percent.


YONHAP