Central Bank’s moves boost Kospi slightly
Korean shares saw a small rise yesterday despite the central bank’s decision to freeze its key interest rate.The benchmark Kospi closed at 2,002.84, up 2.34 points or 0.12 percent from the previous day.
Foreign investors led the mini-rally, buying 187.6 billion won ($184 million) worth of local shares. Retail investors also bought 74.7 billion won worth of shares.
The monetary committee of the Bank of Korea kept the benchmark interest rate at 2.5 percent. According to Korea Exchange, the fact that one of the committee members opposed the rate freeze implies that the central bank might support loosening its monetary policy in the near future to boost the economy, and this caused the market to rise.
Except for Samsung Electronics and SK Hynix, all of the top 10 companies in terms of market capitalization showed increases in stock prices.
But Samsung fell 0.15 percent to 1.31 million won and SK Hynix dropped 0.9 percent to 49,300 won due to the news that Samsung decided to expand its semiconductor production.
Hyundai Motor climbed 2.01 percent to 228,500 won. Naver, the largest Web search engine, rose 0.25 percent to 807,000 won.
Steelmaker Posco inched up 0.17 percent to 300,500 won.
Kia Motors went up 0.37 percent to 54,200 won.
LG Chem made a 1.23 percent increase to 287,500 won.
The won weakened 0.1 percent to 1,013.45 per dollar, according to data compiled by Bloomberg. The currency reached 1,008.37 on July 4, the strongest level since 2008. One-month implied volatility, a gauge of expected swings in the exchange rate used to price options, dropped 15 basis points to 4.47 percent.
Korea’s government bonds gained, sending yields to 14-month lows, as the central bank said economic growth has slowed and that the decision to keep its benchmark interest rate unchanged wasn’t unanimous.
“Today’s BOK statement and the governor’s stance signal a rate cut, and now the focus will be on how many times it is lowered,” said Kim Hong-joong, a Seoul-based fund manager at Samsung Asset Management.
BY song su-hyun, Bloomberg [ssh@joongang.co.kr]
with the Korea JoongAng Daily
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