- Chinese equities rise on speculation state funds bought shares
- Won earlier declined after China's growth missed estimates
South Korea’s won erased losses to rise for a third day as Chinese stocks jumped the most in more than two months, bolstering demand for emerging-market assets.
Shanghai shares rallied 3.3 percent on speculation state funds bought local equities, and amid the prospect of further monetary easing by Chinese authorities. The won earlier fell toward a five-year low after a report showed China’s economy, South Korea’s largest overseas market, grew less than forecast last quarter. The Kospi index of local stocks rose 0.6 percent.
"There was dollar-selling pressure from offshore traders as Chinese stocks rose more in afternoon trades," said Kim Daehoon, a foreign-exchange trader of Busan Bank in Seoul.
The won strengthened 0.4 percent to close at 1,205.99 a dollar in Seoul after dropping as much as 0.2 percent, according to data compiled by Bloomberg. The currency’s 2.8 percent decline this year is Asia’s worst performance and follows a 7.2 percent slide in 2015.
China’s gross domestic product increased 6.8 percent in the fourth quarter from a year earlier, less than the 6.9 percent median estimate in a Bloomberg survey of economists. The figures clouded the outlook for South Korean exports, which contracted every month last year.
China’s woes are increasing faster than expected, South Korea’s Finance Minister Yoo Il Ho said Monday, adding that authorities need to preemptively monitor external uncertainties.
South Korea’s 10-year government bonds fell, with the yield rising three basis points to 2.07 percent, Korea Exchange prices show. The three-year yield was little changed at 1.65 percent.