Stocks rebound after central bank's rate decision

A screen in Hana Bank's trading room in central Seoul shows the Kospi closing at 2,328.61 points on Wednesday, up 10.85 points, or 0.47 percent, from the previous trading day. [YONHAP]

Stocks rebounded Wednesday on eased uncertainties about the central bank's rate decision. The won rose against the dollar.

The benchmark Kospi added 10.85 points, or 0.47 percent, to close at 2,328.61 points.

Trading volume was relatively small at about 303 million shares worth some 5.9 trillion won ($4.5 billion), with gainers outnumbering losers 550 to 298.

Institutions bought a net 356.7 billion won worth of stocks, while foreigners sold a net 99.4 billion won and retail investors offloaded a net 256.8 billion won.

The key stock index rebounded after a two-day loss since Monday, despite an overnight U.S. stock fall.

The Bank of Korea (BOK) delivered an unprecedented 0.5 percentage-point rate hike to combat fast-growing inflation pressure pushed by high energy and commodity prices.

The BOK governor said one or two more rate increases may be possible before the end of this year if the path of inflation remains within its expectations.

Investors' eyes are now on the U.S. consumer price index (CPI) for June, a key gauge for the Federal Reserve's rate decision at the end of this month.

"The BOK's big step and the stabilizing currency markets seem to have affected the local stock market," Meritz Securities analyst Lee Jin-woo said.

"Eased short-term uncertainties seem to have pushed up the stock prices a bit, although we still see uncertainties about events like the U.S. CPI data," he added.

In Seoul, Samsung Electronics slipped 0.17 percent to 58,000 won, with SK hynix growing 0.75 percent to 94,000 won. Hyundai Motor rose 2.51 percent to 183,500 won, with Hyundai Mobis swelling 2.94 percent to 210,000 won.

The local currency closed at 1,306.9 won against the dollar, down 5.2 won from the previous session's close.

The Kosdaq gained 12.40 points, or 1.65 percent, to close at 763.18 points.

Bond prices, which move inversely to yields, closed higher. The yield on three-year government bonds dropped 8.2 basis points to 3.212 percent, and the yield on the benchmark 10-year government bond lost 1.8 basis points to 2.97 percent.

BY CHO JUNG-WOO, YONHAP [cho.jungwoo1@joongang.co.kr]