S.Korea stocks hit 5-1/2 mth high on Fed, China PMI; won firms

Wed May 21, 2014 10:35pm EDT

* KOSPI supported by Fed minutes, China flash mfg PMI
    * Won gains modestly amid intervention caution

    SEOUL, May 22 (Reuters) - South Korean shares rose to their
highest level in 5-1/2 months on Thursday as minutes of U.S.
Federal Reserve's latest meeting offered no sign of rate hikes
in the near future and as China's factory sector showed signs of
stabilising.
    The Korea Composite Stock Price Index (KOSPI) was up
0.6 percent at 2,021.22 points as of 0225 GMT, the strongest
intraday level since Dec. 3, 2013.
    "Investors are focusing on the positives: no near term
interest rate hike in the U.S. and improved figures in the
China's factory activity survey," said Samsung Securities'
analyst Kim Yong-goo.
    On Wednesday, minutes of the Fed meeting showed the Fed was
merely engaged in "prudent planning" and not signalling it was
ready to normalize monetary policy or raise interest rates anay
time soon. 
    The HSBC Flash China Manufacturing Purchasing Managers'
Index (PMI) recovered to 49.7 in May from April's final reading
of 48.1, beating a Reuters' poll forecast of 48.1 as domestic
and export orders recovered. 
    "The figure below-50 still indicates a contraction in the
sector, and the recovery in China is not formidable enough for
the investors to count on. The market is expected to be trapped
in a boxed pattern in the near-term as the cheers dry out
quickly," he added.
    Foreign investors purchased a net 150 billion won ($146.1
million) worth of KOSPI shares by near midday, after picking up
more than 2 trillion won during its seven-day buying through
Wednesday.
    Shipbuilding and chemical names led gains, with Hyundai
Heavy Industries Co Ltd and Lotte Chemical Corp
 rising 3 percent and 5 percent, respectively. 
    The won firmed on demand by exporters for settlements
and on the better-than-expected China's PMI survey, but possible
dollar-buying intervention by South Korean foreign exchange
authorities capped further gains.
    The local currency was quoted at 1,025.1 against
the dollar as of 0225 GMT, up 0.2 percent from Wednesday's
onshore close at 1,026.9.
    
                       0225 GMT    Prev close
 Dollar/won            1,025.1       1,026.9
 Yen/won           10.0995/946       10.1252
 *KTB futures           105.96        105.98
 KOSPI                2,021.22      2,008.33
 * Front-month futures on three-year treasury bonds
($1 = 1026.9500 Korean Won)

 (Reporting by Jungmin Jang; Editing by Kim Coghill)
Comments (0)
This discussion is now closed. We welcome comments on our articles for a limited period after their publication.