Kospi rises without help from foreigners

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Kospi rises without help from foreigners

Korean stocks finished slightly higher yesterday
as retail and institutional investors
scooped up shares while foreign investors
took to the sidelines at the start of third quarter
earnings season.
The local currency rose against the U.S.
dollar.
The benchmark Kospi advanced 4.52
points, or 0.23 percent, to 1,972.91.
Trading volume was moderate at 322
million shares worth 3.7 trillion won ($3.6
billion), with 447 losers outnumbering 382
gainers.
Samsung Electronics, which announced
its operating profit had plunged below 5 trillion
won, saw its shares go up 1 percent.
Among large cap shares, Korea Electric
Power Corporation (Kepco) gained 2.87 percent,
Posco increased 2 percent, Hyundai
Mobis rose 2.9 percent and Kia Motors edged
up 0.9 percent.
On the other hand, Hyundai Motor lost
1.36 percent and Naver fell 1.16 percent.
The won rose the most in six weeks as the dollar weakened after uneven U.S. labormarket data prompted investors to re-assess the timing of the Federal Reserve’s likely interest-rate increases.

The won climbed 0.5 percent to 1,063.68 per dollar, the biggest gain since Aug. 22.

One-month implied volatility, a gauge of expected swings in the exchange rate used to price options, dropped 23 basis points, or 0.23 percentage point, to 8.12 percent.

“The dollar showed a big correction overnight as some investors took profit from the recent rally,” said Kim Dong-wook, a Seoul-based currency trader for Kookmin Bank. “I expect the trend of buying dollars on dips against the won to continue as expectations persist for Korea to cut rates.”

Bank of Korea Governor Lee Ju-yeol also spoke at a regular parliamentary audit yesterday.

The central bank, which held borrowing costs at 2.25 percent last month after cutting them back from 2.5 percent in August, has its next monetary policy review session on Oct. 15.

The yield on the 2.75 percent government bonds due June 2017 fell two basis points to 2.25 percent, and that on the five-year notes dropped one basis point to 2.42 percent, Korea Exchange prices show.


BY KIM JUNG-YOON, BLOOMBERG [kjy@joongang.co.kr]

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