Seoul shares spike 1.7 pct on hopes for slowdown in Fed’s rate hikes

SEOUL– South Korean stocks rose for the second straight day Thursday on hopes that the U.S. Federal Reserve may slow down its aggressive monetary tightening. The local currency gathered ground against the U.S. dollar.

The benchmark Korea Composite Stock Price Index (KOSPI) soared 39.22 points, or 1.74 percent, to close at 2,288.78. Trading volume was moderate at 579.8 million shares worth 8.34 trillion won (US$5.87 billion) with gainers far outpacing decliners 770 to 111.

“The overnight fall on Wall Street has had a limited impact on the KOSPI as the weaker earnings by megacap tech firms were already reflected in the market,” said Seo Sang-young, an analyst at Mirae Asset Securities Co.

The U.S. S&P 500 and Nasdaq finished lower Wednesday (local time), with the Dow Jones Industrial Average closing a tad higher, largely dampened by weaker earnings reports by major tech firms, including Microsoft and Alphabet.

“What’s drawing attention more is that the dollar is falling, which means the won will go up and that’s a positive factor for the foreign inflow,” Seo said.

Foreigners scooped up a net 380.7 billion won worth of local equities, with institutions also buying a net 514.3 billion won. Individual investors sold off a net 903.6 billion won.

Analysts also noted that recent U.S. economic data showed signs of contraction in the world’s largest economy, renewing the expectation that the Fed may go easy on its hawkish interest rate hikes after next week’s monetary policy meeting.

Canada’s central bank on Wednesday (local time) raised its interest rate by 0.5 percentage point, lower than the 0.75 percentage-point increase predicted earlier.

In Seoul, most large-cap shares finished bullish across the board.

Market bellwether Samsung Electronics rose 0.17 percent to 59,500 won. Top battery maker LG Energy Solution Ltd. climbed 2.08 percent to 540,000 won, with smaller rival Samsung SDI spiking 7.39 percent to 727,000 won.

Samsung C&T, the de facto holding company of Samsung, soared 6.25 percent to 119,000 won after the country’s richest conglomerate announced heir Lee Jae-yong will formally take the helm of the tech empire as chairman.

In contrast, chip giant SK hynix tumbled 4.15 percent to 90,000 won after reporting a plunge in its third-quarter earnings earlier this week.

LG Display, a major flat panel maker, also slipped 1.51 percent to 13,050 won.

The local currency ended at 1,417.00 won against the U.S. dollar, up 9.6 won from Wednesday’s close.

Bond prices, which move inversely to yields, closed lower. The yield on three-year Treasurys rose 4.6 basis points to 4.254 percent and the return on the benchmark five-year government bonds added 3.9 basis points to 4.359 percent.

Source: Yonhap News Agency

Leave a Reply

Your email address will not be published. Required fields are marked *

scroll to top