July 13, 2020

Stocks rebound on currency swap deal with US

PUBLISHED : March 20, 2020 - 16:28

UPDATED : March 20, 2020 - 16:28

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South Korean stocks rebounded sharply on March 21 as investors were buoyed by the currency swap deal between Seoul and Washington, snapping a freefall of seven consecutive sessions. The Korean won was also sharply up against the U.S. dollar.

The benchmark Korea Composite Stock Price Index (KOSPI) soared 108.51 points, or 7.44 percent, to close at 1,566.17. Trading volume was high at 807 million shares worth 10.4 trillion won (US$8.41 billion), with gainers far outpacing losers 824 to 68.

The combined market cap of the main bourse also bounced back above the 1,000 trillion-won threshold after falling below it for the first time in more than eight years a day earlier.

Overnight, Wall Street rebounded after the U.S. Federal Reserve announced it signed currency swap agreements with nine central banks around the globe, including the Bank of Korea, to stabilize the virus-hit currency market.

Seoul and Washington have signed a $60 billion bilateral currency swap agreement in a move expected to relieve the liquidity crunch caused by the global spread of the new coronavirus.

“The financial market became stable following the Fed‘s decision to seek currency swaps with nine countries, including Australia, which has been facing signs of a recession,” said Seo Sang-young, a researcher at Kiwoom Securities Co.

The stock trading was briefly halted during the session after the indexes increased at an exceptional pace.

Foreigners remained net sellers for the 12th consecutive session.

Overseas investors dumped a net 585 billion won worth of local stocks, with their accumulated sell-offs reaching a net 9.1 trillion won.

Retail investors net bought stocks worth 200 billion won, and institutions scooped up a net 289 billion won.

Shares gathered ground across the board.

Top market cap Samsung Electronics moved up 5.7 percent to 45,400 won and No. 2 chipmaker SK hynix climbed 8.41 percent to 74,800 won. Battery maker Samsung SDI rebounded 18.31 percent to 216,500 won.

No. 1 carmaker Hyundai Motor advanced 7.89 percent to 71,100 won, and its auto parts arm Hyundai Mobis gained 8.91 percent to close at 140,500 won. Kia Motors added 7.1 percent, reaching 24,150 won.

Leading online portal giant Naver increased 6.94 percent to 154,000 won, and top mobile messenger operator Kakao moved up 11.57 percent to 149,500 won.

Air carriers also rebounded after falling nearly 30 percent in the previous session. Korean Air shot up 12.13 percent to 15,250 won, and Asiana Airlines added 20.48 percent, closing at 2,735 won.

The local currency closed at 1,246.50 won against the U.S. dollar, up 39.20 won from the previous session’s close. (Yonhap)

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