Seoul Stocks Rise for Third Consecutive Day Amid U.S. Rate Cut Hopes

SEOUL - South Korean stocks closed slightly higher on Monday, marking the third consecutive day of gains, driven by expectations that the U.S. Federal Reserve may initiate rate cuts in 2024. However, the local currency weakened against the U.S. dollar during the same period.

According to Yonhap News Agency, The benchmark Korea Composite Stock Price Index (KOSPI) rose marginally by 3.3 points, or 0.13 percent, to close at 2,566.86. Trading volume was relatively light, with 377.2 million shares exchanged, amounting to 10.02 trillion won (US$7.73 billion). Stocks that gained in value outnumbered those that declined, with 453 winners to 427 losers. This upward trend in the market follows the Federal Reserve's decision last week to keep its rate unchanged while signaling possible cuts for 2024. Analyst Lee Kyung-min from Daeshin Securities commented on the Fed’s recent stance, suggesting that anticipations for rate cuts next year might lead to an earlier-than-expected rise in the KOSPI. Lee further predicted that this upward momentum is likely to continue into the early part of the first quarter of 2024.

Battery-related shares were among the top performers, with POSCO Future M increasing by 1.39 percent to close at 365,500 won, and Ecopro Materials surging by 26.04 percent to 213,000 won. HMM, South Korea's leading container shipper, saw its shares soar by 14.12 percent to 17,450 won, buoyed by expectations of an imminent announcement of a preferred bidder for the company as part of a debt restructuring scheme.

Steelmakers also finished on a positive note, with industry leader POSCO Holdings rising 1.98 percent to 489,500 won. Similarly, chemical firms enjoyed gains, led by LG Chem which added 1.01 percent to end at 498,000 won. In contrast, tech shares, including Samsung Electronics, which slid 0.55 percent to 72,900 won, and top automaker Hyundai Motor and leading refiner SK Innovation, which shed 0.41 percent and 0.79 percent to close at 192,000 won and 137,000 won respectively, faced declines.

The local currency closed at 1,297.20 won against the U.S. dollar, down 0.70 won from the previous session’s close. In the bond market, prices closed higher, inversely correlating with yields. The yield on three-year Treasurys fell 0.4 basis point to 3.277 percent, while the yield on five-year government bonds also decreased by 1.1 basis points to 3.301 percent.

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