Stocks jump as Moon talks budget, Trump hedges

An employee looks at the Kospi displayed on a screen in the dealing room of KB Kookmin Bank, in the financial district of Yeouido, western Seoul, Monday. [NEWS1]

Stocks closed sharply higher Monday on hopes of a quick economic recovery prompted by a government push for a third supplementary budget and eased concerns over tensions between the United States and China. The won sharply rose against the dollar.

The Kospi surged 35.48 points, or 1.75 percent, to close at 2,065.08, the highest reading since March 5. Trading volume was moderate at about 982.5 million shares worth some 9.6 trillion won ($7.9 billion), with winners outnumbering losers 709 to 166.

Foreigners purchased a net 110.3 billion won, with institutions scooping up a net 326.3 billion won. Retail investors offloaded a net 447.4 billion won for profit-taking.

President Moon Jae-in confirmed the government's push for this year's third supplementary budget, which he said must be the largest in the country's history, prompting hopes for a quick recovery of the economy hit by the Covid-19 pandemic.

"President Moon's comments on the third supplementary budget seemed to have cast a positive influence over the stock market," HI Investment & Securities analyst Park Sang-hyun said.

The stock index started off strong with improved investor sentiment, helped by the milder-than-expected political friction between the United States and China over Beijing's passage of a new national security law that may severely undermine civil liberties of Hong Kong citizens.

"Mr. Trump has had many difficulties from the new coronavirus, and seems to be averting that pressure by maintaining the U.S.-China tension to a certain degree that does not harm his home economy," Park said.

In the local market, most large cap shares ended higher.

Samsung Electronics gained 0.99 percent to 51,200 won, while SK hynix spiked 2.58 percent to 83,600 won.

Pharmaceutical firm Samsung BioLogics added 1.13 percent to 629,000 won, while Celltrion jumped 6.56 percent to 227,500 won.

Auto shares were in positive territory. Hyundai Motor climbed 2.04 percent to 100,000 won, with its smaller affiliate Kia Motors advancing 1.02 percent to 34,600 won.

The secondary Kosdaq spiked by 22.04 basis points or 3.09 percent to close at 735.72.

The local currency closed at 1,225.0 won per dollar, down 13.50 won from the previous session's close.

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