S.Korea stocks bounce back as govt announces stimulus budget, virus cases fall

* KOSPI rises, foreigners net sellers

* Korean won strengthens against U.S. dollar

* South Korea benchmark bond yield rises

* For the midday report, please click

SEOUL, Sept 1 (Reuters) - Round-up of South Korean financial markets: ** South Korean shares closed up 1% on Tuesday after the government unveiled aggressive spending measures to blunt the economic damage from the COVID-19 pandemic and as manufacturing activity improved in China. ** The Korean won strengthened, and the benchmark bond yield rose. ** By 0632 GMT, the benchmark KOSPI rose 23.38 points, or 1.01%, to 2,349.55. ** Foreigners were net sellers of 209.7 billion won worth of shares on the main board.

** South Korea said it was ready to boost policy support if the rate of cases worsen and unveiled plans to boost total spending by 8.5% to a record 555.8 trillion won ($468.92 billion) next year. ** Also helping sentiment, the Korea Centers for Disease Control and Prevention reported 235 new coronavirus cases as of midnight Monday, dropping slightly for five straight days.

** Elsewhere, manufacturing activity in China expanded at the fastest clip in nearly a decade in August, as factories ramped up output to meet rebounding demand, a private survey showed.

** The won was quoted at 1,183.0 per dollar on the onshore settlement platform, up 0.41% from its previous close of 1,187.8. ** In offshore trading, the won was quoted at 1,182.1 per dollar, up 0.5%, while in non-deliverable forward trading its one-month contract was quoted at 1,181.6. ** MSCI’s broadest index of Asia-Pacific shares outside Japan was down 1.26%. ** The KOSPI has risen 6.91% this year.

** The trading volume during the session in the KOSPI index was 1,060.49 million shares. ** The most liquid 3-year Korean treasury bond yield rose by 3.9 basis points to 0.979%, while the benchmark 10-year yield rose by 7.2 basis points to 1.585%. (Reporting by Cynthia Kim; Editing by Amy Caren Daniel)