Fed’s freeze helps Korean markets rise
Korean stock markets nudged up as the Federal Reserve froze interest rates on Wednesday on the worries about the U.S. economy’s fragility.The benchmark Kospi finished at 2,041.88, up 0.34 percent, and the tech-heavy secondary market Kosdaq gained 0.92 percent to 725.2.
By industry, pharmaceuticals, cosmetics and chemicals enjoyed upswings while hotels and car-related shares lost.
Pharmaceutical companies soared and several on the Kospi and the Kosdaq flew close to the new trading limit rise of 30 percent. Daewoong Pharmaceutical, listed on the primary market, jumped 21.33 percent to 111,500 won ($101).
Top cosmetics maker AmorePacific added 3.21 percent to 402,500 won while another beauty company, LG Household & Healthcare, jumped 4.48 percent to 769,000 won.
Lotte Chemical soared 5.07 percent to 300,500 won on news of a contract to construct an ethylene facility with a one million-ton annual capacity with U.S. chemical company Axiall. LG Chem advanced 3.09 percent to close at 283,500 won.
Hyundai Motor, Korea’s top automaker and No. 3 by market cap, fell 3.31 percent to 131,500 won. Its parts maker affiliate Hyundai Mobis declined 2.84 percent to 205,000 won.
The won rose the most in three months as the Federal Reserve’s lowering of its longer-term interest-rate projections fueled demand for riskier assets. The currency closed up 1 percent to 1,107.12 a dollar in Seoul, according to data compiled by Bloomberg.
“Dollar-buying positions that had piled up against the won are cleared after the Fed meeting,” said Ryoo Hyun-jung, the chief currency trader at Citibank Korea in Seoul. “The result of the Fed’s meeting is more dovish than some traders expected.”
Government bonds rose, with the yield on the notes due June 2018 falling two basis points to 1.78 percent, Korea Exchange prices showed. The 10-year yield declined four basis points to 2.52 percent.
While higher U.S. interest rates may lead to some capital outflows, Korea will be able to withstand any uncertainty, Vice Finance Minister Joo said.
BY KIM HYUN-MIN, BLOOMBERG [kim.hyunmin@joongang.co.kr]
with the Korea JoongAng Daily
To write comments, please log in to one of the accounts.
Standards Board Policy (0/250자)