Market rebounds a bit on U.S. jobs data

Seoul shares slightly rebounded yesterday, up 0.46 percent from the previous day, propelled by strong individual and institutional buying on the back of a rosy outlook for U.S. employment data and Japanese economic indicators. The local currency fell against the greenback.

The benchmark Kospi added 8.85 points, or 0.46 percent, to close at 1,932.70. Trading volume was low at 268.1 million shares worth 3.67 trillion won ($3.27 billion) with gainers outstripping losers 533 to 296.

However, the continued foreign sell-off of Samsung Electronics and jitters ahead of a meeting of the U.S. Federal Open Market Committee, which will be held on June 18 to 19 local time, held back the index.

Earlier last Friday, shares of Samsung Electronics plunged by 6 percent, causing a significant blow to the Kospi and creating a domino effects on other IT stocks.

“Although negative reports about Samsung have led to falls, this year’s performance is expected to show satisfactory progress, especially when the earnings for the third quarter are released along with the launch of the Galaxy Note 3 in September,” said Noh Geun-chang, a senior analyst at HMC Securities.

Foreign funds sold more Korean shares than they bought for a second day, exchange data show, after China’s industrial production rose a less-than-forecast 9.2 percent from a year earlier and factory-gate prices fell for a 15th month, official data showed June 9.

Exports rose only 1 percent from a year earlier, a separate report showed June 8, while imports dropped 0.3 percent - signs of the Chinese economy losing steam at a worrying pace.

The yield on the 2.75 percent bonds due March 2018 rose five basis points to 2.97 percent, prices from Korea Exchange show. That matched the level on June 5, which was the highest for a benchmark five-year security in five months.

The won fell 1 percent to 1,127.47 per dollar in Seoul, the biggest decline since May 23, according to data compiled by Bloomberg.

One-month implied volatility, a measure of expected moves in the exchange rate used to price options, rose 40 basis points, or 0.40 percentage point, to 9.92 percent.

By Kim Jung-yoon, Bloomberg [kjy@joongang.co.kr]