South Korean stocks finished higher Tuesday as investors are optimistic about a rate freeze at the upcoming Federal Reserve's rate-setting meeting. The local currency sharply gained ground against the U.S. greenback.
The benchmark Korea Composite Stock Price Index (KOSPI) added 8.6 points, or 0.33 percent, to close at 2,637.95.
Trading volume was moderate at 674.4 million shares worth 10.9 trillion won (US$8.57 billion), with the number of decliners outpacing gainers 470 to 385.
Foreign investors scooped up a net 115.5 billion won worth of local shares and institutions purchased a net 153.9 billion won.
The U.S. central bank will decide on the key interest rate at its two-day meeting starting Tuesday, while the country's consumer price index will be released later Tuesday.
"The KOSPI seems to be linked with the pace of U.S. tech blue chips, which have been on a bullish run amid slowing inflation," said analyst Choi Yoon-ah from Shinhan Securities. "But cosmetics and retail stocks will be affected by concerns over a Korea-China diplomatic row."
Tech shares rose sharply as chip giant Samsung Electronics went up 1.41 percent to 72,000 won, and its rival SK hynix jumped 4.09 percent to 119,500 won.
Top carmaker Hyundai Motor advanced 0.92 percent to 198,000 won, and Kia climbed 0.86 percent to 82,300 won.
But financial shares went south, with KB Financial Group dropping 0.51 percent to 48,500 won and Hana Financial Group sliding 1.68 percent to 41,000 won.
Retail and cosmetic shares were also among losers on escalating tensions between Seoul and Beijing. Leading department store operator Shinsegae fell 1.3 percent to 190,200 won, and cosmetics maker LG H&H lost 0.39 percent to 517,000 won.
The Korean won closed at 1,271.4 won against the U.S. dollar, up 16.9 won from the previous session's close. It marks the highest since Feb. 14, when it closed at 1,269.4 won.
Bond prices, which move inversely to yields, ended mixed. The yield on three-year Treasurys fell 0.9 basis point to 3.484 percent, and the return on the benchmark five-year government bonds stayed unchanged at 3.502 percent.
Source: Yonhap News Agency