Korean stocks surged the most in nine months in New York on speculation that threats from North Korea may be diminishing after the totalitarian state said it doesn’t oppose resuming talks with the U.S.
The Bank of New York Mellon Korea ADR Index, which tracks American depositary receipts of South Korean companies, rose 3.4 percent to 177.31 at 12:08 p.m., set for the biggest gain since June 29. That followed the benchmark Kospi Index’s 0.1 percent gain to 1,922.21 in Seoul. The won advanced 0.5 percent versus the dollar.
In its first conciliatory gesture following months of threats to attack South Korea and American bases, an unidentified Foreign Ministry spokesman said North Korea wasn’t opposed to resuming dialogue with the U.S. in a statement today on the official Korean Central News Agency. Korean ADRs have declined 6.3 percent as the totalitarian state has repeatedly said the region is on the brink of war since conducting a nuclear test in February.
“It’s a valuation thing, plus lack of threats from North Korea,” Elena Ogram, who manages $50 million in emerging-markets assets at Bank am Bellevue AG in Zurich, said by telephone. “People get tired of being afraid all the time. They’re looking at stocks that have better fundamentals and appealing valuations.”
ADRs of LG Display Co., the world’s second-biggest maker of flat panels, added 2.9 percent to $14.04 in New York. Steelmaker Posco jumped 3.3 percent to $71.93, the biggest advance since Jan. 2.
South Korea unveiled a 17.3 trillion won ($15.4 billion) supplementary budget to boost growth by 0.3 percentage points and create 40,000 jobs, the Finance Ministry said in a statement in Sejong.