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Stocks rebound 1% as Middle East jitters ease

Jan 08,2020
Stocks closed sharply higher as investors set out for bargains amid eased uncertainties over oil prices prompted by tensions in the Middle East. The won jumped against the dollar.

Kospi jumped 20.47 points, or 0.95 percent, to close at 2,175.54. Trading volume was moderate at 559 million shares worth 5.08 trillion won ($4.35 billion), with winners outnumbering losers 512 to 316.

On Monday, the index plunged nearly 1 percent on growing concerns over military tensions between the United States and major oil-producing states in the Middle East that came after a U.S. drone strike killed the head of an elite Iranian force late last week.

Iran has vowed to take corresponding measures, while the United States has said they will lead to additional strikes against multiple Iranian targets.

Global oil prices have since skyrocketed.

“The market anxiety still persists as the conflict between the United States and Iran continues, while the possibility of retaliation by Iran has been raised,” said Kim Hoon-gil, an analyst at Hana Financial Investment.

“But the stock market showed a gradual rebound on a view that there will unlikely be additional armed clashes,” the analyst added.

Lee Sang-jae, an analyst at Eugene Investment & Securities, noted Middle East risks have rarely had any long-term effects on the financial market.

“Also, the uncertainties over global oil prices have been somewhat eased by a U.S. decision to boost its oil production,” Lee said.

Foreigners purchased a net 191.3 billion won, extending their buying streak to a third consecutive session. Individuals and institutions offloaded a net 164.5 billion won and 44.5 billion won, respectively. Most large caps closed in positive territory.

Samsung Electronics added 0.54 percent to 55,800 won, while pharmaceutical company Celltrion surged 2.89 percent to 178,000 won.

LG Household & Health Care soared 7.53 percent to 343,000 won, with LG Chem soaring 1.30 percent to 311,000 won.

Hyundai Motor lost 0.43 percent to 115,500 won, while Kia Motors gained 0.36 percent to 42,050 won.

The secondary Kosdaq gained 8.13 points, or 1.24 percent, to close at 663.44.

The won closed at 1,166.40 won per dollar, down 5.7 won from the previous session’s close.

Bond prices, which move inversely to yields, closed in a positive terrain. The yield on three-year bonds added 5.3 basis point to 1.329 percent, and the return on the benchmark 10-year government bond gained 2.0 basis points to 1.80 percent.

BY KANG JAE-EUN, YONHAP [kang.jaeeun@joongang.co.kr]


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