South Korean markets on Monday were buoyed by rallies in the U.S. markets upon a strong job report and Federal Reserve Chairman Jerome Powell’s dovish remarks on Friday that the U.S. central bank will be “patient” on interest rate increases.
On Monday, the main Kospi rose 1.34 percent to end at 2,037.10. The Korean won closed up 5.9 won at 1,118.6 against the U.S dollar.
The Seoul markets were lifted by huge gains on Wall Street after the job figure was released on Friday (local time) by the U.S. Department of Labor that non-farm payrolls in the country grew by 312,000 in December 2018, far exceeding the estimation by the Wall Street Journal at 176,000.
The department also announced that average hourly wage rose 3.2 percent against a year-ago period. The sound job report has eased fears of investors on global economic uncertainties, prompting them to turn to risky assets, experts found.
U.S. stocks also soared after Powell’s comments indicating a pause in Fed’s interest rate hike pace. “With the muted inflation readings that we’ve seen coming in, we will be patient as we watch to see how the economy evolves,” Powell said at the American Economic Association annual meeting on Friday. “We’re always prepared to shift the stance of policy and to shift it significantly if necessary.”
Positive news from China was another factor boosting the Korean market. China’s Ministry of Commerce said Friday that it will hold a vice-ministerial trade talk with the U.S. in Beijing on Monday and Tuesday. Meanwhile, the People’s Bank of China (PBOC) decided to cut its reserve requirement ratio by 100 basis points.
By Jung Joo-won and Choi Mira
[ⓒ Pulse by Maeil Business Newspaper & mk.co.kr, All rights reserved]