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South Korean shares rose for three straight sessions Monday after negotiations for the China-South Korea free trade agreement (FTA) reached a substantive conclusion.
The benchmark Korea Composite Stock Price Index (KOSPI) rose 18. 36 points, or 0.95 percent, to close at 1,958.23. Trading volume stood at 308.27 million shares worth 4.42 trillion won (4.08 billion U.S. dollars).
Export shares gained ground as the conclusion of the China- South Korea FTA deal is expected to boost exports of South Korean companies to the world's largest consumer market.
Chinese President Xi Jinping and his South Korean counterpart Park Geun-hye announced the conclusion of the FTA talks, launched in May 2012, at a meeting in Beijing on the sidelines of the ongoing Asia-Pacific Economic Cooperation (APEC) meetings.
Woo Tae-hee, assistant minister of South Korea's Ministry of Trade, Industry and Energy, told reporters here that the South Korea-China FTA will enable South Korea to secure an opportunity for penetrating in the Chinese market in advance of others, anticipating that it will serve as a new growth engine for the South Korean economy.
Under the deal, more than 90 percent of all South Korean and Chinese goods currently being traded will be free of tariffs immediately or within 20 years after the free trade pact takes effect.
According to the Korea Institute for International Economic Policy (KIEP)'s estimates, the FTA deal would lift South Korea's real gross domestic product (GDP) by 0.92 percentage points to 1. 25 percentage points over the next five years after the deal comes into force. In the next 10 years, the real GDP would be increased by 2.28 percentage points to 3.04 percentage points.
Market bellwether Samsung Electronics surged 5.1 percent, and memory chip giant SK Hynix added 0.3 percent. Top automaker Hyundai Motor advanced 2.8 percent and its affiliate Kia Motors climbed 1.9 percent. The nation's biggest auto parts maker Hyundai Mobis gained 0.4 percent.
The South Korean currency finished at 1,085.0 won against the greenback, up 8.7 won from Friday's close.
Bond prices ended lower. Yields on the liquid three-year treasury notes rose 2.8 basis points to 2.118 percent, and the return on the benchmark 10-year government bonds added 1.6 basis points to 2.686 percent.
