Seoul stocks inch up as investors wait for Fed decision

A screen at Hana Bank's trading room in central Seoul shows the Kospi closing at 2,989.39 points on Wednesday, up 1.44 points, or 0.05 percent, from the previous trading day. [NEWS1]

Seoul stocks ended higher Wednesday, but investors remained cautious ahead of the Federal Reserve's rate decision. The won fell against the dollar.

The benchmark Kospi rose 1.44 points, or 0.05 percent, to close at 2,989.39 points, snapping a three-session losing streak.

Trading volume was moderate at about 425.9 million shares worth some 8.1 trillion won ($6.8 billion), with losers outnumbering gainers 521 to 319.

Foreigners sold a net 27 billion won and institutions offloaded 167 billion won. Retail investors bought 169 billion won.

Investors are waiting on cues from the two-day Fed meeting, which ends Wednesday, to reorganize their portfolios amid the extended Covid-19 pandemic, analysts said.

Given their hawkish note in the run-up to the meeting, Fed policymakers on Wednesday are expected to unveil a quicker tapering of bond purchases, paving the way for earlier interest rate hikes next year.

"Investors have already priced in a faster end to the central bank's quantitative easing program and several rate increases next year though uncertainties involving the omicron virus variant," Kiwoom Securities analyst Kim Yoo-mi said.

Tech shares advanced in Seoul, allowing the Kospi to end in positive territory.

Samsung Electronics. rose 0.78 percent to 77,600 won, and chipmaker SK hynix climbed 2.07 percent to 23,500 won.

Internet portal operator Naver dropped 1.15 percent to 387,500 won, and Kakao remained unchanged at 118,500 won.

Carmaker Hyundai Motor fell 0.95 percent to 209,000 won, and its sister company Kia decreased 1.17 percent to 84,300 won.

Pharmaceutical firm Samsung Biologics rose 1.57 percent to 904,000 won, and Celltrion edged up 0.24 percent to 206,500 won.

Battery maker SK Innovation slipped 0.71 percent to 210,000 won.

The Kosdaq gained 0.71 points, or 0.07 percent, to close at 1,003.52.

The local currency closed at 1,185.2 won against the dollar, up 2.6 won from the previous session's close.

Bond prices, which move inversely to yields, closed lower. The yield on three-year government bonds added 2.6 basis points to 1.809 percent, and the yield on the benchmark 10-year government bond gained 3.2 basis points to 1.44 percent.

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