Stocks rise on heavy foreign buying

A screen in Hana Bank's trading room in central Seoul shows the Kospi closing at 3,224.64 points on Thursday, up 8.46 points, or 0.26 percent, from the previous trading day. [NEWS1]

Stocks rebounded Thursday as foreign investors bought heavily. The won fell against the dollar.

The benchmark Kospi rose 8.46 points, or 0.26 percent, to close at 3,224.64 points.

Trading volume was high at about 1.9 billion shares worth some 18.8 trillion won ($16.8 billion), with losers outnumbering gainers 426 to 418.

Foreigners scooped up a net 699 billion won, the largest daily purchases since March 11, and retail investors purchased 385 billion won. Institutions sold a net 1.1 trillion won.

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The Kospi got off to muted start as investors took a wait-and-see approach before the U.S. consumer price index (CPI) for May is published later in the day.

The price gauge is expected to provide hints of the direction of the Fed's economic diagnosis in the Federal Open Market Committee meeting next week.

The key stock index gained ground as of late morning, helped by advances by Kakao, Naver and SK Telecom.

Mobile text messenger operator Kakao's stocks jumped upon the regulator's preliminary approval for its insurance business. Korea's major mobile carrier SK Telecom spiked after it announced that it will spin off a new investment company in November.

Despite the inflation uncertainties, foreigners raked in futures and options on the quadruple witching day, which comes as a raft of futures and options expire.

"Volatility was high in local stock markets ahead of the U.S. CPI data release and influences of the quadruple expiration of futures and options," Daeshin Securities analyst Lee Kyung-min said.

In Seoul, Samsung Electronics slipped 0.12 percent to 81,000 won, while chipmaker SK hynix added 0.41 percent to 123,000 won.

Internet portal operator Naver surged 4.18 percent to 373,500 won, with Kakao jumping 3.49 percent to 133,500 won. Automaker Hyundai Motor lost 1.46 percent to 236,000 won.

The Kosdaq gained 8.98 points, or 0.92 percent, to close at 987.77.

The local currency closed at 1,115.8 won against the dollar, up 0.4 won from the previous session's close.

Bond prices, which move inversely to yields, closed mixed. The yield on three-year government bonds gained 0.2 basis point to 1.282 percent, and the yield on the benchmark 10-year government bond lost 5.3 basis points to 1.49 percent.

BY LEE TAE-HEE, YONHAP [lee.taehee2@joongang.co.kr]