Seoul stocks rally on U.S.-China trade optimism, Korean won sharply up vs dollar

SEOUL, June 19 (Yonhap) -- South Korean shares surged by more than 1 percent Wednesday on growing optimism about a U.S.-China trade deal. The local currency sharply rose against the U.S. dollar.

The benchmark Korea Composite Stock Price Index (KOSPI) gained 1.24 percent, or 26.07 points, to 2,124.78. It was the first time since May 8 that the index had topped the 2,120-mark. Trading volume was high at 847.5 million shares worth 4.86 trillion won (US$4.1 billion), with winners far outnumbering losers 539 to 277.

The KOSPI had a strong start, tracking overnight gains on Wall Street. U.S. stock markets surged after U.S. President Donald Trump said that he would meet with Chinese leader Xi Jinping at the Group of 20 summit in Japan next week, boosting hopes that the world's two largest economies may agree to end their trade spat.

The Dow Jones industrial average jumped 1.35 percent Tuesday (local time). The Nasdaq composite surged 1.39 percent.

Dovish comments from European Central Bank chief Mario Draghi also boosted expectations that the U.S. Federal Reserve may take a similar accommodative stance. The Federal Open Market Committee (FOMC) is scheduled to deliver its interest-rate decision Wednesday (local time).

"The market responded positively as uncertainties from the trade dispute were somewhat eased following the news that Trump-Xi talks will happen," said Yoon Jung-seon, an analyst at KB Investment & Securities. "Rising expectations of monetary policy easing also pushed up the index ."

Foreign and institutional investors bought a net 300 billion won and 170 billion won worth of local stocks, respectively, while individuals dumped a net 461.3 billion won.

Most large-cap shares closed higher, with tech stocks leading the gains.

Market kingpin Samsung Electronics increased 2.25 percent, and major chipmaker SK hynix shot up 5.99 percent.

Top steelmaker POSCO inched up 1.04 percent, while No. 2 player Hyundai Steel climbed 0.96 percent.

Pharmaceutical giant Celltrion advanced 1.68 percent, and Samsung BioLogics climbed 0.32 percent.

However, auto shares finished in negative terrain, with No. 1 carmaker Hyundai Motor losing 0.71 percent and its smaller sister company Kia Motors sliding 1.51 percent. Auto parts maker Hyundai Mobis was flat at 223,500 won.

The South Korean won closed at 1,176.1 won against the U.S. dollar, sharply up 9.7 won from the previous session's close, its highest level since May 8, when the comparable figure was 1,169.40 won.

kdon@yna.co.kr
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