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South Korean Stocks Jump Amid Easing US Inflation Hopes; Korean Air Adds 4% Amid US Route Share Talks with Rivals

09/13/2022 | 06:52am
(MT Newswires) -- South Korean stocks closed nearly 3% higher on Tuesday as investors looked forward to US inflation data later in the day. Investors also eagerly looked forward to the US Federal Reserve’s rate hike decision next week.

According to a Forbes report, the US central bank is expected to raise its benchmark rate by 75 basis points on Sept. 21, after two straight rate hikes of 75bps earlier this year.

Futures markets currently indicated a 90% chance that the US central bank makes a 75bps move than a small chance of 50bps.

The Korea Composite Stock Price Index (Kospi) rose 65.26 points, or 2.7%, to close at 2,449.54. The Kosdaq increased 18.98 points, or 2.4%, to close at 796.79.

The South Korean stock markets were closed on Friday and Monday on account of the Chuseok festivities.

In corporate news, Korean Air Lines (KRX:003490) is currently speaking to several Southeast Asian airlines to share its Incheon-Los Angeles route as it makes an effort to gain antitrust approval from US regulators in its acquisition of Asiana Airlines (KRX:020560).

This is because according to the evaluations of both South Korean and the US antitrust watchdogs, after the Asiana Airlines-Korean Air merger, Korean Air is expected to single-handedly fly on the Incheon-Los Angeles route.

Seoul’s Transport Ministry, at present, is reviewing the option for the merger of the two airlines.

"As we wait for the approval for the merger, we are in talks with diverse domestic and foreign airlines to meet the requests of antitrust regulators," a Korean Air official said.

Shares of Asiana Airlines rose more than 3% at market close on Tuesday while those of Korean Air Lines increased more than 4%.

MT Newswires 2022
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