Stocks rise for third straight day on earnings and dovish Fed

A screen in Hana Bank's trading room in central Seoul shows the Kospi closing at 3,242.65 points on Thursday, up 5.79 points, or 0.18 percent, from the previous trading day. [NEWS1]

Stocks rose for the third consecutive session Thursday as investor sentiment improved on optimism for strong corporate earnings and the U.S. Fed's assurance that tapering would require more economic recovery from the pandemic. The won rose against the dollar.

The benchmark Kospi rose 5.79 points, or 0.18 percent, to close at 3,242.65 points.

Trading volume was moderate at about 682 million shares worth some 10.3 trillion won ($9 billion), with gainers outnumbering losers 518 to 299.

Foreigners sold a net 229 billion won, while institutions bought 258 billion won. Retail investors offloaded a net 17 billion won.

Stocks closed higher, backed by second-quarter surprise earnings by large caps, including Samsung Electronics and other heavyweights on the Kospi.

Investors took time to digest the Federal Open Market Committee meeting results. Fed Chairman Jerome Powell said the U.S. economy is recovering, but more progress is needed to meet the conditions for scaling back the Fed's accommodative policies.

Trading turned choppy in the late morning, however, largely as investors sought to lock in profits from estimate-beating earnings.

"Increasing tech sell-offs by foreigners seem to have reduced the Kospi’s gains," Mirae Asset Securities analyst Seo Sang-young said.

"Investor optimism for strong corporate earnings is still playing out in the markets, but there are some concerns that the local economy may have reached its peak," he added.

Samsung Electronics lost 0.25 percent to 79,000 won, and chipmaker SK hynix closed unchanged at 114,000 won.

Internet portal operator Naver decreased 0.57 percent to 439,500 won, but its rival Kakao gained 0.34 percent to 148,500 won.

Samsung Biologics added 0.55 percent to 911,000 won, while automaker Hyundai Motor edged down 0.22 percent to 222,000 won.

The Kosdaq rose 8.45 percent, or 0.82 percent, to close at 1,044.13.

The local currency closed at 1,146.5 won to the dollar, down 8.1 won from the previous session's close.

Bond prices, which move inversely to yields, closed mixed. The yield on three-year government bonds added 1.2 basis points to 1.431 percent, and the yield on the benchmark 10-year government bond lost 1.3 basis points to 1.23 percent.

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