GDP news in U.S. gives market a boost

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GDP news in U.S. gives market a boost

Korean shares enjoyed an upbeat trading day after better-than-expected U.S. gross domestic product data.

The benchmark Kospi inched up 0.68 percent to close at 1,996.89.

Foreigners were net buyers after a day of selling. Institutional investors continued their buying for the second consecutive week. Retail investors were the only net sellers.

Market bellwether Samsung Electronics was up 0.42 percent to 1.43 million won ($1,347). LG Electronics was unchanged at 67,000 won. SK Hynix, the world’s second-largest memory chip maker, rose 4.82 percent to 37,000 won, after announcements that the company will start building a new pap building next year to boost competitiveness in the DRAM market.

Hyundai Motor, the nation’s largest automaker, climbed 1.78 percent to 228,500 won, and its sister automaker Kia Motors was up 1.83 percent to 55,700 won. Auto parts affiliate Hyundai Mobis increased 1.24 percent to 285,000 won.

Hyundai Securities jumped 3.11 percent to 5,960 won after Hyundai Group announced it will sell its financial companies. Hyundai Merchant Marine soared 14.85 percent to 11,600 won.

The Korean won closed little changed at 1,060.80 per dollar in Seoul, after weakening as much as 0.2 percent to 1,063.19, data show. It touched 1,063.90 on Dec. 20, the lowest level since Nov. 28. The won has strengthened 6.6 percent versus the yen in the past three months

“U.S. GDP data exceeded estimates, pushing the dollar up against other currencies,” Sun Sung-in, a Seoul-based economist at Shinhan Investment wrote in a research note yesterday. “Since the Fed’s taper decision, the yen’s weakness is expected to continue, and it is worrisome that Korean exporters may lose price competitiveness against Japanese rivals.”

The won’s one-month implied volatility, a gauge of expected moves in the exchange rate used to price options, climbed 13 basis points, or 0.13 percentage point, to 6.26 percent, data show.

The currency’s strength versus the yen hurts blue chip companies such as Samsung Electronics and Hyundai Motor, which compete with Japanese counterparts overseas.


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