Market tops 1,990 thanks to Janet Yellen
Korean shares rose above the 1,990 mark thanks to rallies of large-cap shares.The benchmark Kospi finished at 1,990.47 on Wednesday, slightly surpassing the 1,990 mark, largely due to reduced concerns about early interest rate hikes by the U.S. Federal Reserve.
It is the first time since October that the main bourse in Seoul rebounded to that level.
Favorable news from China that its manufacturing output expanded for the first time in three months also helped the market rally.
Foreign investors purchased about 222 billion won ($202 million) worth of local shares, while institutional investors bought about 60 billion won worth.
Samsung Electronics jumped 0.88 percent to nearly 1.38 million won. Hyundai Motor rose 0.92 percent to 164,000 won.
Korea Electric Power Corporation surged 2.24 percent to 45,550 won. Hyundai Mobis inched up 0.6 percent to 251,000 won.
Posco climbed 1.84 percent to 277,000 won. Samsung SDS soared 2.99 percent to 276,000 won. Naver edged up 0.63 percent to 641,000 won.
Korea’s won rose the most in almost two weeks after Federal Reserve Chair Janet Yellen signaled an increase in U.S. interest rates is unlikely before mid-year.
The dollar weakened after Yellen told the Senate Banking Committee on Tuesday a rate increase was unlikely for “at least the next couple” of meetings. Higher U.S. rates reduce the allure of emerging-market assets. Bank of Korea Governor Lee Ju-yeol said the authority will manage policy while considering global uncertainties, which can arise at any time even after euro area finance ministers agreed to extend aid to Greece.
The won rose 1 percent, the most since Feb. 13, to close at 1,099.10 a dollar in Seoul, data compiled by Bloomberg showed. The Bloomberg Dollar Spot Index, a gauge of the greenback’s performance versus 10 peers, fell for a second day.
“Bets for a stronger dollar diminished along with expectations for an early rate increase after Yellen’s remarks,” said Jahng Won, a Seoul-based currency trader at Shinhan Bank. “Offshore investors boosted their dollar sales particularly in the afternoon.”
BY SONG SU-HYUN, BLOOMBERG [ssh@joongang.co.kr]
with the Korea JoongAng Daily
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