Stocks close up as investors weigh potential rate hikes by Fed

A screen in Hana Bank's trading room in central Seoul shows the Kospi closing at 2,472.05 points on Wednesday, up 21.12 points, or 0.86 percent, from the previous trading day. [YONHAP]

Stocks closed higher Wednesday, with investors weighing the potential rate hikes by the U.S. Federal Reserve and the volatility in the currency market. The won rose against the dollar.

After choppy trading, the Kospi added 21.12 points, or 0.86 percent, to close at 2,472.05 points.

Trading volume was higher than usual at about 397 million shares worth some 8.7 trillion won ($6.5 billion), with gainers outnumbering losers 538 to 281.

Institutions sold a net 269.8 billion won, while foreigners bought 209.4 billion won and retail investors purchased 46.9 billion won.

The Kospi opened lower in the wake of the Fed chair's reaffirmation in Jackson Hole that the U.S. central bank would continue its fight against four-decade high inflation. But the index rebounded in the afternoon on strong advances by chipmakers.

"The dollar weakened in favor of chipmakers and automakers," said Choi Yoo-joon, an analyst at Shinhan Investment.

"But the greenback is likely to remain strong for a while, since [Fed officials] are supporting aggressive policy tightening, in addition to the [uncertainties from] the upcoming U.S. jobs data later this week," he added.

In Seoul, Samsung Electronics gained 1.53 percent to 59,700 won, with SK hynix adding 2.15 percent to 95,200 won.

Hyundai Motor rose 0.26 percent to 196,000 won, with Kia growing 0.87 percent to 80,800 won.

Kakao gained 0.27 percent to 73,400 won, while Naver rose 0.84 percent to 240,000 won.

Among losers, LG Energy Solution shed 0.64 percent to 462,500 won, and Samsung Biologics slipped 0.12 percent to 835,000 won. Vaxcell Bio, a developer of cancer vaccines and drugs, plummeted 4.81 percent to 71,200 won.

The local currency closed at 1,337.6 won against the dollar, down 9.1 won from the previous session's close, after touching 1,352.30 won mid-session, another high for over 13 years.

The Kosdaq gained 10.02 points, or 1.26 percent, to close at 807.04 points.

Bond prices, which move inversely to yields, closed lower. The yield on three-year government bonds rose 5.0 basis points to 3.639 percent, and the yield on the 10-year government bond rose 0.6 basis points to 3.11 percent.

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