SEOUL– South Korean stocks rebounded Wednesday, after signs of contraction in the U.S. economy rekindled hopes that the U.S. Federal Reserve may start slowing the pace of interest rate hikes. The local currency gained against the U.S. dollar.
The benchmark Korea Composite Stock Price Index (KOSPI) closed up 14.49 points, or 0.65 percent, to 2,249.56. Trading volume was moderate at 553.3 million shares worth 7.38 trillion won (US$5.17 billion) with declining issues outnumbering advancing ones 593 to 269.
“Better-than-expected third-quarter earnings and expectations for a less aggressive Fed monetary tightening are helping investors recover appetite for risky assets,” said Han Ji-young, an analyst at Kiwoom Securities Co.
“Weaker U.S. economic data suggest the impact of the Fed’s monetary tightening is kicking in. Given these circumstances, it’s fair to say that the possibility is open for the Fed to slow down on the rate increases,” Han said.
Data showed U.S. October consumer confidence fell from a month earlier, with home price growth also slowing in August from the previous month.
The softer data renewed speculation that the Fed could start scaling down the rate hikes after its November monetary policy meeting set for Nov. 1-2.
Foreigners were net buyers of local equities, scooping up a net 611.1 billion won. Institutions and individual investors, however, unloaded a net 119 billion won and 496.3 billion won, respectively.
Top-listed tech companies drove up the main index.
Market bellwether Samsung Electronics soared 2.95 percent to 59,400 won and top battery maker LG Energy Solution jumped 3.52 percent to 529,000 won after reporting a turnaround in the third-quarter earnings.
Samsung SDI, another major battery maker, climbed 3.36 percent to 677,000 won on the back of record-high profit and revenue in the third quarter.
Automakers, however, finished in the red. Top player Hyundai Motor fell 1.23 percent to 160,500 won, with smaller affiliate Kia losing 1.21 percent to 65,500 won.
Internet portal giant Naver slumped 3.63 percent to 159,500 won and its rival Kakao also sank 2.25 percent to 47,700 won.
The local currency ended at 1,426.60 won against the U.S. dollar, up 6.5 won from Tuesday’s close.
Bond prices, which move inversely to yields, closed higher. The yield on three-year Treasurys inched down 1.3 basis points to 4.208 percent and the return on the benchmark five-year government bonds slipped 6.3 basis points to 4.320 percent.
Source: Yonhap News Agency