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Seoul stocks rebound on eased Brexit woes

By KH디지털2
Published : June 28, 2016 - 15:58

Korean shares advanced for a second straight session on Tuesday, rebounding from Friday's 3.09 percent plunge caused by Britain's decision to quit the European Union. The local currency also gained against the U.S. dollar.

The benchmark Korea Composite Stock Price Index rose 9.37 points, or 0.49 percent, to 1,936.22. Some 368 million shares worth 4.36 trillion won ($3.72 billion) traded hands on the main bourse, with gainers outnumbering losers 614 to 206.  



Investors appear to have breathed a sigh of relief as central banks worldwide vowed to take a policy action to pump liquidity into financial markets to contain market volatility following Britain's unprecedented vote last week to leave the 28-nation single biggest economic bloc, analysts said.

On Tuesday, the Korean government said it will draw up a 10 trillion-won supplementary budget to cushion the fallout from the Brexit turmoil and support the country's economic growth this year.

The finance ministry said Korea's economy is widely expected to grow by around 2.5 percent this year, far lower than the government's previous estimate of 3.1 percent.

"The government's stimulus plans apparently gave a boost to the markets. Moreover, lower chances of a U.S rate hike this year also eased investors' risk-averse sentiment," NH Investment & Securities Co. analyst Lee Jun-hee said.

But he warned foreigners will continue to sell domestic stocks if they find the government's extra spending programs not working properly in stabilizing the markets.

On Tuesday, foreigners dumped local stocks worth a net 371.3 billion won, which was offset by net buying valued at 324 billion won by institutions and individuals.

Most large-cap stocks trimmed earlier losses or turned higher.

Among gainers, market bellwether Samsung Electronics Co. rose 0.07 percent to 1,399,000 won, the state-run Korea Electric Power Corp. climbed 1.89 percent to 59,300 won, and leading cosmetics maker AmorePacific Corp. gained 2.17 percent.

In contrast, top automaker Hyundai Motor Co. fell 1.77 percent to 139,000 won, No. 2 chipmaker SK hynix Inc. slid 2.81 percent to 31,150 won, and leading retail lender KB Financial Group was down 0.15 percent to 32,300 won. 

The local currency closed at 1,171.30 won against the U.S. dollar, up 11.00 won from the previous session's close.

Bond prices, which move inversely to yields, closed lower. The yield on three-year Treasurys rose 1.2 basis points to 1.248 percent and the return on the benchmark five-year government bond gained 1.2 basis points at 1.301 percent. (Yonhap)


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