Stocks rebound as investors bet U.S. inflation has peaked

Finance

Published: 13 Apr. 2022, 17:54

Stocks rebound as investors bet U.S. inflation has peaked

A screen in Hana Bank's trading room in central Seoul shows the Kospi closing at 2,716.49 points on Wednesday, up 49.73 points, or 1.86 percent, from the previous trading day. [YONHAP]

Stocks rebounded Wednesday after two consecutive sessions of losses as investors bet that inflation in the United States may have peaked and China partly eased its Covid-19 lockdown in Shanghai. The won rose against the dollar.

The benchmark Kospi jumped 49.73 points, or 1.86 percent, to close at 2,716.49 points.

Trading volume was moderate at around 719.4 million shares worth some 9.5 trillion won ($7.75 billion), with gainers outnumbering losers 714 to 164.

Foreigners and retail investors sold stocks worth 62.9 billion won and 585.1 billion won, respectively, while institutional investors picked up shares worth 639.9 billion won.

Consumer prices in the United States spiked 8.5 percent in March from a year earlier, the biggest jump since December 1981.

Investors had girded themselves for the Federal Reserve's aggressive monetary tightening to tame runaway inflation, but they expect the inflationary pressure to ease down the road.

Overnight, the U.S. stock market closed lower.

The Dow Jones Industrial Average retreated 0.26 percent, and the S&P 500 slipped 0.3 percent. The yield on the 10-year U.S. Treasury note slightly fell to 2.72 percent, still around the highest since early 2019.

China also lifted some of its virus restrictions in Shanghai, partly easing woes over the global supply disruptions.

"The possibility of U.S. inflation reaching its peak seemed to have boosted investor sentiment," Park Sang-hyun from Hi Investment & Securities said. "Heightened expectations about economic recovery also had positive effects on the market as jitters about China's Covid-19 situation have calmed down."

Samsung Electronics rose 2.54 percent to 68,700 won, and LG Energy Solution jumped 4.87 percent to 431,000 won.

SK hynix inched up 1.8 percent to 113,000 won, and LG Chem added 2.57 percent to 518,000 won.

The local currency closed at 1,228.00 won against the dollar, down 8.2 won from the previous session's close.

The Kosdaq climbed 13.49 points, or 1.48 percent, to close at 927.31 points.

Bond prices, which move inversely to yields, closed higher. The yield on three-year government bonds declined 10.7 basis points to 2.999 percent, and the yield on the benchmark 10-year government bond retreated 5.2 basis points to 2.72 percent.

BY SHIN HA-NEE, YONHAP [shin.hanee@joongang.co.kr]