Stocks rise nearly 2 percent as concerns ease over Fed rate hikes

Finance

Published: 18 Jul. 2022, 17:08

Stocks rise nearly 2 percent as concerns ease over Fed rate hikes

A screen in Hana Bank's trading room in central Seoul shows the Kospi closing at 2,375.25 points on Monday, up 44.27 points, or 1.90 percent, from the previous trading day. [YONHAP]

Stocks soared nearly 2 percent higher Monday, as the U.S. Federal Reserve is unlikely to deliver a full percentage-point interest rate hike amid deepening concerns over an economic slowdown. The won gained ground against the dollar.

The Kospi rose 44.27 points, or 1.90 percent, to close at 2,375.25. Trading volume was moderate at 318.99 million shares worth 6.99 trillion won ($5.31 billion), with gainers outstripping decliners 778 to 116.

Foreign investors purchased shares worth a net 633.5 billion won, while retailers offloaded a net 426.2 billion won and institutions a net 200.1 billion won.

"Recent U.S. data on retail purchases and inflation expectations were not bad, and concerns over sharper-than-expected rate hikes have eased. Strong gains on Wall Street on Friday, as well as the rise in futures, set a positive tone for the local market," Seo Sang-young, an analyst at Mirae Asset Securities, said.

Some had forecast that the Fed would raise the key rate by 1 percentage point to curb high-flying inflation at next week's session, but Fed officials indicated that it would stick to a 75-basis-point rate hike.

U.S. consumers' inflation expectations eased in July on the back of a drop in oil prices, though its consumer price index jumped 9.1 percent on-year in June, the highest in 41 years.

In Seoul, Samsung Electronics soared 3.17 percent to 61,900 won, and SK hynix jumped 2.33 percent to 101,000 won. Hyundai Motor increased 1.09 percent to 185,500 won and Kia added 1.26 percent to 80,100 won. Samsung Biologics slid 0.86 percent to 810,000 won and Celltrion lost 1.88 percent to 183,000 won.

The local currency ended at 1,317.4 won against the dollar, down 8.7 won from the previous day's close.

The Kosdaq gained 14.33 points, or 1.88 percent, to close at 776.72 points.

Bond prices, which move inversely to yields, closed higher. The yield on three-year government bonds lost 0.8 basis points to 3.208 percent, and the yield on the 10-year government bond lost 4.5 basis points to 2.91 percent.

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