Stocks rise on hopes for stimulus agreement in the U.S.

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Stocks rise on hopes for stimulus agreement in the U.S.

Published: 20 Oct. 2020, 17:45

A screen shows the closing figure for the Kospi in a trading room at Hana Bank in Jung District, central Seoul, on Tuesday. [NEWS 1]

Shares rose for a second straight session Tuesday, as investors hold on to hopes for progress in new U.S. stimulus talks. The won rose to an 18-month high against the dollar.

After choppy trading, the benchmark Kospi rose 11.67 points, or 0.5 percent, to close at 2,358.41.

Trading volume was moderate at about 862 million shares worth some 11.7 trillion won ($10.3 billion), with losers outnumbering gainers 514 to 323.

Foreigners bought a net 43 billion won, while retail investors sold a net 291 billion won. Institutions purchased a net 260 billion won.

In the morning session, the local stock market was roiled by growing impatience over the fiscal stimulus negotiations ahead of the November presidential election.

But the index turned higher in the afternoon session on reports that U.S. House Speaker Nancy Pelosi and Treasury Secretary Steven Mnuchin "continued to narrow their differences" on the virus relief package.

"Foreigners switched to net buyers, and that seems to have pushed up the Kospi," Hi Investment & Securities analyst Park Sang-hyun said.

In Seoul, most large caps closed mixed.

Samsung Electronics added 1.5 percent to 60,900 won. Chipmaker SK hynix, which said it has agreed to buy a memory chip unit from U.S. semiconductor company Intel, fell 1.73 percent to 85,200 won.

Chemical firm LG Chem rose 0.98 percent to 621,000 won, and rechargeable battery maker Samsung SDI spiked 4.72 percent to 432,500 won.

Hyundai Motor slipped 0.3 percent to 167,500 won.

Pharmaceutical firm Samsung Biologics shed 0.58 percent to 682,000 won, and Celltrion lost 3.91 percent to 245,500 won.

Internet portal Naver gained 1.4 percent to 290,000 won, but steelmaker Posco retreated 0.96 percent to 206,500 won.

The local currency closed at 1,139.40 won to the dollar, down 2.6 won from the previous session, marking the highest closing since April 19, 2019.

Analysts said the Korean currency gained ground as the dollar has weakened against major currencies.

The dollar has been weakening since the U.S. Federal Reserve said in its September rate-setting meeting that it will keep interest rates near zero until inflation is on track to meet its 2 percent target.

Bond prices, which move inversely to yields, closed lower. The yield on three-year bonds rose 2 basis points to 0.912 percent, and the return on 10-year bonds rose 2.5 basis points to 0.76 percent.

BY LEE JEE-YOUNG, YONHAP [lee.jeeyoung1@joongang.co.kr]