Kospi rises as recovery hope trounces inflation fear
Stocks advanced Thursday as hopes for a global economic rebound offset inflation worries. The won fell against the dollar.
The benchmark Kospi rose 31.37 points, or 1 percent, to close at 3,178.74 points.
Trading volume was moderate at about 1.2 billion shares worth 16.4 trillion won ($14.6 billion), with gainers outnumbering losers 733 to 157.
Foreigners sold a net 101 billion won, extending their selling streak to a seventh session, while institutions purchased 202 billion won. Retail investors offloaded a net 91 billion won.
The Kospi got off to a weak start, tracking the overnight U.S. tech decline from the quicker-than-expected inflation.
Tech shares retreated in Seoul amid foreign selling and following U.S. Treasury Secretary Janet Yellen's comment that interest rates may have to rise to prevent the economy from overheating.
Steel, heavy industries and chemical shares increased.
The stock index gained ground, however, as institutions scooped up stock on speculation that the fast global recovery would spur the local exporters' earnings.
"U.S. stocks fluctuated on the May 5 holiday due to Yellen's inflation remarks, but U.S. bond yields ended lower," said HI Investment & Securities analyst Park Sang-hyun.
"The impact of the inflation worries seems to have eventually diminished," he said.
In Seoul, Samsung Electronics declined 0.36 percent to 82,300 won, and chipmaker SK hynix lost 2.27 percent to 129,000 won.
Internet portal operator Naver decreased 0.82 percent to 361,500 won, with its rival Kakao moved down 0.43 percent to 115,000 won.
Chemical firm LG Chem climbed 1.96 percent to 938,000 won. Automaker Hyundai Motor closed unchanged from the previous session at 223,500 won, and its sister company Kia lost 0.87 percent to 80,200 won.
Pharmaceutical firm Samsung Biologics advanced 2.49 percent to 783,000 won, and Celltrion declined 2.88 percent to 252,500 won.
The Kosdaq gained 2.79 points, or 0.29 percent, to close at 969.99.
The local currency closed at 1,125.8 won against the U.S. dollar, up 3.2 won from the previous session's close.
Bond prices, which move inversely to yields, closed higher. The yield on three-year government bonds lost 1.8 basis points to 1.114 percent, and the yield on the benchmark 10-year government bond lost 1.8 basis points to 1.57 percent.
BY LEE TAE-HEE, YONHAP [email@example.com]