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Kospi takes cheer in hopes for U.S-China deal

Nov 05,2019
Stocks ended higher on Monday, extending their gains to a third session on hopes of an interim trade deal between the United States and China this month. The won climbed to a four-month high against the U.S. dollar on increased appetite for risky assets.

The Kospi added 30.04 points, or 1.43 percent, to close at 2,130.24, the highest in almost four months. Trading volume was moderate at 470 million shares worth 5.54 trillion won ($4.8 billion), with gainers exceeding losers 663 to 185.

The index exceeded the 2,100 level to close at 2,100.20 points on Friday for the first time since Sept. 24, 2018, when it hit 2,101.04 points.

Investor sentiment improved as investors took a positive cue from unexpectedly strong U.S. jobs data for October and the prospect of at least a partial or small-scale trade deal between the world’s two biggest economies this month, analysts said.

“With no particular downside factors seen this week, investors are shifting their focus to comments by China President Xi Jinping’s planned keynote speech at the Shanghai international import exhibition (from Nov. 5 to 10) and members of the Federal Open Market Committee,” Suh Sang-young, an analyst at Kiwoom Securities said.

On Sunday, U.S. President Donald Trump said a trade deal, once finished, will be signed somewhere in the United States. Moreover, Commerce Secretary Wilbur Ross expressed optimism that the United States would sign a “phase one” trade deal with China in November and that licenses would be released “very shortly” for U.S. firms to sell components to Huawei Technologies.

Tech, steel and airline stocks led gains, with market bellwether Samsung Electronics rising 2.2 percent to 52,300 won, chipmaker SK Hynix climbing 1.9 percent to 84,700 won, steelmaker Posco gaining 1.6 percent to 217,000 won and Korean Air Lines, advancing 3.6 percent to 25,900 won.

Among decliners, Naver fell 1.5 percent to 164,500 won, auto parts maker Hyundai Mobis declined 0.2 percent to 242,500 won and state-run utility Korea Electric Power shed 0.2 percent to 25,300 won.

The secondary Kosdaq gained 6.11 points, or 0.92 percent, to close at 668.45. The local currency closed at 1,159.20 won against the U.S. dollar, down 6.4 won from the previous session’s close.

Bond prices, which move inversely to yields, closed lower. The yield on three-year bonds rose 8.2 basis points to 1.548 percent, and the return on the 10-year government bond climbed 2.6 basis points to 1.71 percent.

BY KIM BYUNG-WOOK, YONHAP [kim.byungwook@joongang.co.kr]


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