SEOUL: South Korean stocks closed 0.4 percent higher on Thursday as investors took heart from China’s hint that there may be no more currency devaluations, analysts said.
In a sharp turnaround from the previous day’s tumble, the South Korean won shot up against the U.S. dollar on expectations the Fed may delay its interest rate hike amid increased financial volatility from Beijing’s currency move and falling international commodity prices.
The benchmark Korea Composite Stock Price Index (KOSPI) gained 7.99 points to 1,983.46. Trading volume was moderate at 372.56 million shares worth 5.13 trillion won (US$4.37 billion), with winners beating losers 619 to 197.
Analysts said the index bounced back from the slump seen in the week’s previous sessions as the Chinese central bank tried to dissipate fears that it may further lower the yuan.
“The past two days were filled with confusion among investors regarding the changes made by the People’s Bank of China,” said Kim Hyung-ryol, an analyst from Kyobo Investment & Securities Co.
“Although a third devaluation was announced in the morning, this time, China’s central bank disclosed its stance on the changes made and its intention … and this helped investors to form a consensus that the devaluation was a necessary move on the part of the Chinese economy.”
