Stocks rally as U.S. debt limit deal seems near

A screen in Hana Bank's trading room in central Seoul shows the Kospi closing at 2,959.46 points on Thursday, up 51.15 points, or 1.76 percent, from the previous trading day. [YONHAP]

Stocks steeply rebounded Thursday as bargain hunters sought oversold shares in hope of a rebound, in addition to the optimism about political wrangling over the debt ceiling in the United States. The won rose against the dollar.

The benchmark Kospi jumped 51.15 points, or 1.76 percent, to close at 2,959.46 points.

Trading volume was moderate at about 586 million shares worth some 11.7 trillion won ($9.8 billion), with gainers outnumbering losers 817 to 84.

Foreigners sold a net 105 billion won, while institutions bought 614 billion won. Retail investors offloaded a net 532 billion won.

The key stock index got off to a strong start after three days of losses.

Investor sentiment was boosted by progress in the U.S. debt ceiling impasse that lifted U.S. stock prices overnight. The U.S. Senate is nearing a deal to raise the debt limit by a certain level that could tide the Treasury over until December.

"The easing concerns about the U.S. debt ceiling seem to have helped the Kospi's rebound," Mirae Asset Securities analyst Park Gwang-nam said.

Most large caps closed higher in Seoul, with tech and auto heavyweights leading the market advance.

Samsung Electronics added 0.42 percent to 71,600 won, but chipmaker SK hynix retreated 0.83 percent to 95,700 won.

Internet portal operator Naver surged 5.5 percent to 393,500 won, and Kakao jumped 5.75 percent to 119,500 won. Pharmaceutical firm Samsung Biologics jumped 3.03 percent to 815,000 won.

Automaker Hyundai Motor increased 3.61 percent to 201,000 won, with its sister company Kia soaring 6.83 percent to 79,800 won.

Chemical firm LG Chem shed 0.81 percent to 737,000 won, and Kakao Bank advanced 3.45 percent to 60,000 won.

The Kosdaq gained 31.07 points, or 3.37 percent, to close at 953.43.

The local currency closed at 1,190.4 won to the dollar, down 1.9 won from the previous session's close.

Bond prices, which move inversely to yields, closed mixed. The yield on three-year government bonds added 2 basis points to 1.704 percent, and the yield on the benchmark 10-year government bond lost 0.5 basis point to 1.52 percent.

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