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Stock up 1% on hopes for economic stimulus

Aug 21,2019
Stocks surged by 1 percent Tuesday, extending their gains to a second day as hopes of stimulus measures by major economies, such as Germany, boosted investor sentiment. The won gained ground against the dollar.

The benchmark Kospi added 20.35 points, or 1.05 percent, to close at 1,960.25. Trading volume was moderate at about 457 million shares worth a little over 4 trillion won ($3.31 billion), with gainers outnumbering losers 627 to 192.

Prospects for global stimulus grew after Germany pledged a 50 billion-euro ($55 billion) stimulus package in case of a recession.

“China’s lending rate reform and Germany’s $55 billion stimulus package helped remove concerns of a recession while U.S. President Donald Trump’s mention of a 10 percent income tax cut also stipulated investor sentiment,” said Kim Hoon-gil, a researcher at Hana Financial Investment.

The advance in Seoul stocks also followed overnight gains on Wall Street, which came after the United States extended by 90 days the window during which China’s Huawei may purchase components from U.S. companies that signaled a possible breather in the U.S.-China trade dispute.

Foreigners scooped a net 113 billion won worth of local shares, ending their 13-day selling streak. Institutions off-loaded a net 70 billion won, with individuals selling a net 60 billion won.

Most large caps closed in positive terrain.

Samsung Electronics surged 1.95 percent to 44,450 won, and SK Hynix added 1.73 percent to 76,400 won. LG Electronics gained 0.83 percent to 60,800 won.

LG Chem advanced 0.93 percent to 324,000 won, while leading mobile service provider SK Telecom gained 0.65 percent to 234,000 won. Leading steelmaker Posco rose 1.44 percent to 211,500 won, and NCSoft surged 2.08 percent to 539,000 won.

Auto shares, however, ended lower. Hyundai Motor lost 1.17 percent to 126,500 won, with Kia Motors also shedding 1.26 percent to 42,950 won. Yet auto parts maker Hyundai Mobis added 1.03 percent to 244,500 won.

The secondary Kosdaq added 12.36 points, or 2.08 percent, to finally recover above the 600 mark at 607.01.

The local currency closed at 1,208.00 won to the dollar, down 2.9 won from the previous session.

Bond prices, which move inversely to yields, ended lower. The yield on three-year bonds gained 0.8 basis points to 1.101 percent, and the yield on 10-year bonds added 1.4 basis points to 1.198 percent.

BY KO JUN-TAE, YONHAP [ko.juntae@joongang.co.kr]