South Korean shares rebound as US recession fears ease

SEOUL: Round-up of South Korean financial markets:

South Korean shares rebounded sharply on Tuesday, after hitting a 6-1/2-month low in the previous session on the biggest sell-off since late 2008, as U.S. data and policymaker comments eased fears of a recession.

The benchmark KOSPI closed up 80.60 points, or 3.30%, at 2,522.15. On Monday, it fell 8.8% to its lowest level since mid-January.

“The domestic market rebounded on eased worries about the U.S. economy heading towards recession,” said Lee Kyoung-min, an analyst at Daishin Securities.

U.S. stock index futures rose more than 1% in Asian trading hours on Tuesday, after the benchmark indexes dropped 3% on Monday. Japan’s Nikkei jumped 10%, after posting its worst session since the 1987 Black Monday crash in the last session.

U.S. services sector activity rebounded from a four-year low in July, data showed on Monday.

South Korean shares trigger trading curb for first time since 2020 amid tech rout

San Francisco Federal Reserve Bank President Mary Daly on Monday said there was no labour market indicator flashing red at the moment.

Sidecar trading curbs were activated on the benchmark KOSPI index soon after the market opened, as index futures rose sharply.

South Korea’s finance minister said authorities would take market stabilising measures in a swift manner in case of excessive volatility.

Among index heavyweights, chipmaker Samsung Electronics rose 1.54% and peer SK Hynix gained 4.87%, while battery maker LG Energy Solution climbed 4.66%.

Foreigners were net sellers of shares worth 193.1 billion won ($140.44 million), after selling 1.5 trillion won on Monday in their biggest sell-off in 2-1/2 years.

The won was quoted at 1,375.6 per dollar on the onshore settlement platform, 0.41% lower than its previous close.

The most liquid three-year Korean treasury bond yield rose by 11.9 basis points to 2.924%, while the benchmark 10-year yield rose by 12.4 basis points to 2.987%.