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Kospi lifted by sanguine views on U.S. rates

Nov 20,2018
Korean shares ended higher Monday thanks to institutional buying as analysts predicted a slower pace in U.S. interest rate hikes for next year. The Korean won depreciated against the U.S. dollar.

The main Kospi rose 8.16 points or 0.39 percent to close the session at 2,100.56. Trading volume was moderate at 268.93 million shares worth 4.61 trillion won ($4.09 billion).

“When considering the comments from the White House and the dovish remarks within the U.S. Federal Reserve, Chairman [Jerome] Powell will likely try to find a common ground with the market,” said Gwak Hyun-soo, an analyst at Shinhan Investment, in a report Monday. “In such a case, global stock markets will most likely recover from the recent fall by the end of the year.”

Foreign investors continued to offload shares in the main index, selling a net 92.8 billion won. Retail investors also sold a net 60.6 billion won. Meanwhile, institutional investors were net buyers for the sixth consecutive session, picking up a net 162.3 billion won worth of shares.

Market leader Samsung Electronics fell 0.80 percent to 43,650 won, and No.2 chipmaker SK Hynix declined 0.43 percent to 69,800 won. LG Electronics also ended the session down, falling 0.28 percent to 71,600 won.

Financial shares were also losers, with Shinhan Financial Group down 0.82 percent to 42,400 won, and KB Financial Group falling 0.42 percent to 46,900 won.

Meanwhile pharmaceutical giant Celltrion ended 2.23 percent up to close the session at 229,000 won.

Refiners were also up as SK Innovation rose 3.05 percent to 203,000 won, and S-Oil added 0.45 percent to 111,500 won.

Leading steelmaker Posco added 1.96 percent to 260,500 won.

Carmakers ended mixed as Hyundai Motor ended 1.46 percent down to 101,500 won, while its sister company Kia Motors rose 0.68 percent to 29,700 won.

Naver fell 0.89 percent to 111,500 won, while tech rival Kakao jumped 4.39 percent to 107,000 won.

The secondary Kosdaq also rose 11.95 points, or 1.73 percent, to end the session at 702.13. The tech and bio-heavy index was helped by a 0.78 percent rise in the U.S. Nasdaq Biotechnology Index on Friday.

The Korean won closed at 1,128.60 won against the greenback up 0.10 won from the previous session.

Bond prices, which move inversely to yields, ended higher. The yield on three-year bonds fell 0.5 basis points to 1.94 percent. The return on 10-year bonds declined 1.9 basis points to 2.20 percent.

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