Stocks snap six-day losing streak, rising 0.6%
Shares snapped a six-day losing streak Thursday as China took steps to limit the decline of the yuan, easing concerns that the trade war with the United States may morph into a full-blown currency war. The won sharply advanced against the dollar.The benchmark Kospi rose 10.9 points, or 0.6 percent, to close at 1,920.61. Trading volume was moderate at 762 million shares worth 6.56 trillion won ($5.4 billion), with gainers outnumbering losers 766 to 97.
On Monday, the United States designated China as a currency manipulator for the first time since 1994 after China allowed the yuan to break through the key 7-per-dollar level, sending the Kospi index to the lowest point in three years.
“The pace of the yuan’s weakening slowed down against the dollar, lifting investor sentiment. Chicago Fed President Charles Evans’ comments that trade headwinds could justify additional rate cuts also gave a boost to the equities markets,” said Suh Sang-young, an analyst at Kiwoom Securities.
But he didn’t expect any significant rebound in the main bourse in the coming weeks due to the lack of upside momentum.
Large-cap stocks were mixed across the board.
Samsung Electronics fell 1.3 percent to end at 42,650 won, and No. 2 chipmaker SK Hynix declined 1.4 percent to 72,300 won.
State-run Korea Electric Power Corporation was down 3.6 percent to 25,450 won.
Among gainers, Hyundai Motor rose 2.4 percent to 130,000 won, and Kia Motors added 2.38 percent to 43,050 won.
LG Chem advanced 0.8 percent to 318,000 won, and Korean Air was up 1.9 percent to 23,600 won. Celltrion surged 3.70 percent to 154,000 won.
The Kosdaq gained 20.80 points, or 3.68 percent, to close at 585.44.
The local currency closed at 1,209.20 won against the dollar, down 5.7 won from the previous session’s close.
“As the yuan levels off, the won gained against the dollar for a second straight session. The People’s Bank of China appears to be controlling the yuan exchange rate,” said Jeon Seung-ji, who works as an analyst at Samsung Futures.
Bond prices, which move inversely to yields, closed lower. The yield on three-year bonds gained 1.2 basis points to 1.165 percent. The yield on 10-year bonds added 1.9 basis points to 1.270 percent.
BY KO JUN-TAE, YONHAP [ko.juntae@joongang.co.kr]
with the Korea JoongAng Daily
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