SEOUL — The South Korean stock market experienced a notable surge on Thursday, with the Korea Composite Stock Price Index (KOSPI) climbing 1.81 percent, buoyed by the U.S. Federal Reserve's decision to maintain interest rates.
According to Yonhap News Agency, Seoul's shares rose significantly following the Fed's decision to keep its benchmark lending rate unchanged, signaling a less aggressive stance towards rate hikes. The Fed's rate, which remains at a 22-year high, has been held steady for the second consecutive period as the central bank continues its efforts to reduce inflation to a 2 percent goal.
The KOSPI's rise was complemented by a robust trading volume, with 370 million shares traded, totaling 7.57 trillion won (approximately US$5.63 billion). Gainers outnumbered losers, with 693 stocks closing higher compared to 207 that fell.
Despite the market upswing, foreign investors offloaded a net 141.3 billion won in shares, while individual investors also sold shares worth 438 billion won. Institutional investors moved counter to these trends, purchasing a net 273.5 billion won in stocks.
The optimism in Seoul was partially attributed to positive sentiments from the technology sector. U.S. chipmaker AMD's optimistic projection for the artificial intelligence chip market buoyed South Korea’s tech giants. Samsung Electronics saw a 1.6 percent increase in its shares, and SK hynix shares surged 4.16 percent.
Battery manufacturers also saw gains, with LG Energy Solution's stock rising 3.71 percent and Samsung SDI’s shares up by 5.99 percent. The automotive sector joined the upward trend, with Hyundai Motors, Kia, and auto parts manufacturer Hyundai Mobis all registering gains.
Conversely, Asiana Airlines experienced a significant drop, plummeting 8.68 percent following its decision to divest its cargo business amid Korean Air’s efforts to secure European Union regulatory approval for the takeover of the airline.
The South Korean won strengthened against the U.S. dollar, closing at 1,342.90 won, a gain of 14.4 won from the previous session.
Bond markets also reflected a positive trend, with the yield on three-year Treasurys falling 9.2 basis points and the return on five-year government bonds decreasing 10.3 basis points.