Stocks rise after rate rise brings clarity and calms investors

A screen in Hana Bank's trading room in central Seoul shows the Kospi closing at 2,477.26 points on Thursday, up 29.81 points, or 1.22 percent, from the previous trading day. [NEWS1]

Stocks finished higher Thursday as investors gained clarity on the Bank of Korea's monetary tightening. The won gained ground against the dollar.

The Kospi added 29.81 points, or 1.22 percent, to close at 2,477.26, taking the winning streak to two days.

Trading volume was moderate at 410.32 million shares worth 7.06 trillion won ($5.29 billion), with gainers far outpacing decliners 708 to 150.

Institutions and foreign investors, combined, picked up a net 161.41 billion won worth of shares, while retail investors sold a net 179.6 billion won.

Earlier in the day, the Bank of Korea raised its policy rate by 0.25 percentage points to 2.5 percent to rein in soaring inflation. It was its seventh rate increase since August last year and fourth successive rate hike.

Investors will also be looking for clues as to the U.S. federal Reserve's rate hike plan at the annual meeting in Jackson Hole, Wyoming, slated for Friday, where Federal Reserve Chair Jerome Powell is scheduled to give a speech.

The minutes of the Fed's July meeting hinted at continued aggressive monetary tightening to fight high inflation.

"That the BOK raised its policy rate and the exchange rate has stabilized a bit has sent positive signals to the stock market," Park Kwang-nam, an analyst at Mirae Asset Securities, said.

Most big-cap shares ended higher.

Samsung Electronics added 1.19 percent to 59,700 won, and SK hynix gained 0.97 percent to 94,100 won, while LG Chem also inched up 0.33 percent to 616,000 won.

Samsung Biologics gained 2.05 percent to 845,000 won. Naver rose 1.24 percent to 244,500 won, and Kakao added 1.6 percent to 76,100 won.

The local currency ended at 1,335.20 to the dollar, down 6.9 won from the previous session's close.

The Kosdaq gained 14.23 points, or 1.79 percent, to close at 807.37 points.

Bond prices, which move inversely to yields, closed lower. The yield on three-year government bonds climbed 22.2 basis points to 3.531 percent, and the yield on the 10-year government bond rose 6.0 basis points to 3.11 percent.

BY LIM JEONG-WON, YONHAP [lim.jeongwon@joongang.co.kr]