Stocks rebound on hopes of an interest rate cut by the U.S. Fed

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Stocks rebound on hopes of an interest rate cut by the U.S. Fed

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Stocks snapped a three-day losing streak to advance 0.78 percent on Monday and closed above the 2,000 point mark, helped by the hint of a possible rate cut by the U.S. Federal Reserve. The won rose sharply against the dollar.

The benchmark Kospi rose 15.50 points, or 0.78 percent, to 2,002.51. The main index plunged 12 percent in the past week.

Korea has reported a total of 4,212 confirmed coronavirus cases, with the death toll reaching 26 as of Monday.

Investors appear to be taking a positive cue from Fed Chairman Jerome Powell’s comments on Friday that the central bank is open to a rate cut if necessary.

Noh Dong-kil, an analyst at NH Investment & Securities, said that Powell’s statement gave a boost to the main index.

Foreign investors sold a net 785.4 billion won ($657.6 million) worth of local stocks. Individuals and institutions scooped up a combined 731.1 billion won.

Large-cap stocks were mixed across the board.

Samsung Electronics rose 1.48 percent to 55,000 won, and SK hynix jumped 4.78 percent to 92,100 won.

Bio firms ended in a positive territory. Celltrion inched up 2.94 percent closing at 175,000 and Samsung BioLogics added 0.76 percent.

Among decliners, carmaker Hyundai Motor fell 1.30 percent to 113,500 won, and Hyundai Mobis shed 1.43 percent closing at 207,000 won. Posco slipped 2.05 percent to 191.500 won.

Stocks of medical firms related to the coronavirus continued its winning streak for the second session in the Kosdaq market. Seegene, a company that produces test kits for the coronavirus, increased by 10.68 percent.

The local currency closed at 1,193.70 won against the dollar, sharply down 20.00 won from the previous session’s close.

The secondary Kosdaq was up 16.93 points, or 2.77 percent, to close at 627.66.

Bond prices, which move inversely to yields, closed mixed. The yield on three-year bonds added 2.5 basis points to 1.129 percent, while the return on the benchmark 10-year government bond shed 11 basis points to reach 1.154 percent.

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