ID :
23530
Thu, 10/09/2008 - 17:33
Auther :
Shortlink :
http://m.oananews.org//node/23530
The shortlink copeid
Seoul shares end higher on rate cuts
SEOUL, Oct. 9 (Yonhap) -- South Korean stocks finished slightly higher in seesaw trading Thursday as financial authorities around the world slashed borrowing rates to rein in market turmoil, analysts said. The local currency gained against the U.S. dollar.
The benchmark Korea Composite Stock Price Index (KOSPI) edged up 8.2 points, or
0.64 percent, to 1,294.89. Volume was heavy at 445.13 million shares worth 5.54
trillion won (US$4.02 billion), with gainers outpacing losers 414 to 406.
"Decisions to slash borrowing costs by central banks, including South Korea's,
seem to have relayed a sense of relief over the current liquidity crunch," said
Bae Sung-young, an analyst at Hyundai Securities.
Against market expectations, the Bank of Korea (BOK) slashed its key interest
rate by a quarter percentage point following overnight rate cuts by its U.S.,
European and Asian counterparts. Experts said the step was meant to convey that
the bank is ready to address the contracting economy.
BOK Gov. Lee Seong-tae hinted towards further rate cuts down the road, saying "it
is possible there will be an interest rate change later on."
Bae noted, however, that Wall Street's failure on Wednesday to reverse its
downswing despite authorities' coordinated moves may drag on world economies
until after the U.S. presidential election.
Financials and construction shares benefited from the rate cut decision, with
brokerage giant Mirae Asset & Securities gaining 5.92 percent to 89,500 won and
top builder Daewoo Engineering & Construction rising 2.11 percent to 12,100 won.
Tech exporters and automakers also enjoyed gains. Hynix Semiconductor climbed
3.97 percent to 15,700 won and LG Electronics advanced 4.78 percent to 109,500
won. POSCO rose 1.65 percent to 370,000 won, adding ground with other
steelmakers.
Telecom stocks, however, traded lower. KTF, the nation's second-largest wireless
carrier, slumped 1.72 percent on news that top management officials have tendered
their resignations over the company's kick-back scandal. Its larger rival SK
Telecom shed 0.7 percent. Shipyards also fell, with Hyundai Heavy Industries
losing 0.93 percent to finish at 212,500 won.
The South Korean won closed at 1,379.5 won to the dollar, up 15.5 won from
Wednesday's close. Dealers said they suspect foreign exchange authorities are
engaging in speculated won buying. The local currency plunged to a 10-year low in
the previous session.
Bond prices, which move inversely to yields, soared on the BOK's rate cut. The
return on three-year Treasuries plunged 0.28 percentage point to 5.33 percent and
the benchmark yield on five-year government bonds also tumbled 0.29 percentage
point to 5.34 percent.
The benchmark Korea Composite Stock Price Index (KOSPI) edged up 8.2 points, or
0.64 percent, to 1,294.89. Volume was heavy at 445.13 million shares worth 5.54
trillion won (US$4.02 billion), with gainers outpacing losers 414 to 406.
"Decisions to slash borrowing costs by central banks, including South Korea's,
seem to have relayed a sense of relief over the current liquidity crunch," said
Bae Sung-young, an analyst at Hyundai Securities.
Against market expectations, the Bank of Korea (BOK) slashed its key interest
rate by a quarter percentage point following overnight rate cuts by its U.S.,
European and Asian counterparts. Experts said the step was meant to convey that
the bank is ready to address the contracting economy.
BOK Gov. Lee Seong-tae hinted towards further rate cuts down the road, saying "it
is possible there will be an interest rate change later on."
Bae noted, however, that Wall Street's failure on Wednesday to reverse its
downswing despite authorities' coordinated moves may drag on world economies
until after the U.S. presidential election.
Financials and construction shares benefited from the rate cut decision, with
brokerage giant Mirae Asset & Securities gaining 5.92 percent to 89,500 won and
top builder Daewoo Engineering & Construction rising 2.11 percent to 12,100 won.
Tech exporters and automakers also enjoyed gains. Hynix Semiconductor climbed
3.97 percent to 15,700 won and LG Electronics advanced 4.78 percent to 109,500
won. POSCO rose 1.65 percent to 370,000 won, adding ground with other
steelmakers.
Telecom stocks, however, traded lower. KTF, the nation's second-largest wireless
carrier, slumped 1.72 percent on news that top management officials have tendered
their resignations over the company's kick-back scandal. Its larger rival SK
Telecom shed 0.7 percent. Shipyards also fell, with Hyundai Heavy Industries
losing 0.93 percent to finish at 212,500 won.
The South Korean won closed at 1,379.5 won to the dollar, up 15.5 won from
Wednesday's close. Dealers said they suspect foreign exchange authorities are
engaging in speculated won buying. The local currency plunged to a 10-year low in
the previous session.
Bond prices, which move inversely to yields, soared on the BOK's rate cut. The
return on three-year Treasuries plunged 0.28 percentage point to 5.33 percent and
the benchmark yield on five-year government bonds also tumbled 0.29 percentage
point to 5.34 percent.
