Series of global rate cuts lift Korean Kospi
Korean stocks finished slightly higher yesterday as financial authorities around the world slashed borrowing rates to rein in market turmoil, analysts said. The local currency gained against the U.S. dollar.The benchmark Kospi edged up 8.2 points, or 0.64 percent, to 1,294.89. Volume was heavy at 445.13 million shares worth 5.54 trillion won ($4 billion), with gainers outpacing losers, 414 to 406.
“Decisions to slash borrowing costs by central banks, including Korea’s, seem to have relayed a sense of relief over the current liquidity crunch,” said Bae Sung-young, an analyst at Hyundai Securities.
Against market expectations, the Bank of Korea slashed its key interest rate by a quarter percentage point following overnight cuts by its U.S., European and Asian counterparts. Bae noted, however, that Wall Street’s failure on Wednesday to reverse its downswing despite authorities’ coordinated moves may drag on world economies until after the U.S. presidential election.
Financials and construction shares benefited from the rate cut decision, with brokerage giant Mirae Asset and Securities gaining 5.9 percent to 89,500 won, and top builder Daewoo Engineering and Construction rising 2.1 percent to 12,100 won.
Tech exporters and automakers also enjoyed gains. Hynix Semiconductor climbed 3.9 percent to 15,700 won and LG Electronics advanced 4.7 percent to 109,500 won. Posco rose 1.6 percent to 370,000 won, adding ground with other steelmakers.
Telecom stocks, however, traded lower. KTF, the nation’s second-largest wireless carrier, slumped 1.7 percent on news that top management officials have tendered their resignations over the company’s kick-back scandal. Its larger rival SK Telecom shed 0.7 percent.
Shipyards also fell, with Hyundai Heavy Industries losing 0.93 percent to finish at 212,500 won.
The Korean won closed at 1,379.5 won to the dollar, up 15.5 won from Wednesday’s close. The local currency plunged to a 10-year low in the previous session.
Bond prices, which move inversely to yields, soared on the BOK’s rate cut. The return on three-year Treasuries plunged 0.28 percentage point to 5.33 percent and the benchmark yield on five-year government bonds also tumbled 0.29 percentage point to 5.34 percent. Yonhap
with the Korea JoongAng Daily
To write comments, please log in to one of the accounts.
Standards Board Policy (0/250자)