Kospi jumps nearly 2% as DP agrees to scrap capital gains tax

The Kospi rose 46.61 points, or 1.83 percent, to close at 2,588.97 with a rare bipartisan agreement to scrap the implementation of a capital gains tax.

A screen in Hana Bank's trading room in central Seoul shows the Kospi closing at 2,588.97 points on Monday, up 1.83 percent, or 46.54 points, from the previous trading session. [YONHAP]

Shares soared nearly 2 percent Monday to snap their three-day decline as the main opposition party agreed to scrap a plan to push for a capital gains tax. The won sharply rose in value against the dollar.

The Kospi rose 46.61 points, or 1.83 percent, to close at 2,588.97. The Kosdaq gained 25.03 points, or 3.43 percent, to 754.08.

Trade volume was a little slim at 367.8 million shares worth 7.9 trillion won ($5.8 billion), with winners outnumbering losers 619 to 254.

Foreigners and institutions purchased local stocks worth a combined 370.4 billion won, while individuals sold a net 384.1 billion won.

The Kospi rallied after main opposition party leader Lee Jae-myung agreed to the government's move to scrap a financial investment income tax.

In Seoul, Samsung Electronics gained 0.69 percent to 58,700 won, while its chipmaking rival SK hynix soared 6.48 percent to 194,000 won.

Automaker Hyundai Motor climbed 1.41 percent to 216,500 won, with its sister Kia up 3.29 percent to 97,400 won.

Battery and bio shares were also bullish.

Battery maker LG Energy Solution jumped 3.27 percent to 426,000 won, and smaller rival Posco Future M surged 5.7 percent to 241,000 won.

Bio firm Samsung Biologics increased 1.9 percent to 1.02 million won and Celltrion advanced 3.48 percent to 187,400 won.

Internet portal operator Naver also jumped 3.01 percent to 175,700 won and Korea Zinc, the world's largest zinc smelter in the middle of a management control battle, shot up 8.07 percent to 1.09 million won.

But financial shares ended in negative territory, with KB Financial down 1.2 percent to 90,700 won and Hana Financial down 1.31 percent to 60,300 won.

Defense company Hanwha Aerospace slipped 3.04 percent to 367,000 won.

The local currency was trading at 1,370.9 won against the greenback, down 8.5 won from the previous session.

Bond prices, which move inversely to yields, closed lower. The yield on three-year government bonds rose 0.3 basis points to 2.935 percent, and the return on the benchmark U.S. 10-year government bond gained 10.7 basis points to 4.393 percent.

BY KIM JU-YEON, YONHAP [kim.juyeon2@joongang.co.kr]