Stocks jump 1.7 percent as semiconductor shares rebound

A screen in Hana Bank's trading room in central Seoul shows the Kospi closing at 2,255.98 points on Wednesday, up 37.30 points, or 1.68 percent, from the previous trading day. [NEWS1]

Stocks surged over 1.5 percent to snap a four-day losing streak Wednesday as foreigners snatched up shares of Samsung Electronics and other chipmakers.

The Kospi jumped 37.3 points, or 1.68 percent, to close at 2,255.98 points. The won fell against the dollar.

Trading volume was moderate at about 405.6 million shares worth some 6.4 trillion won ($5 billion). Gainers outnumbered losers 651 to 224.

The Kospi got off to a weak start but soon turned higher, as foreigners scooped up tech shares.

Foreigners and institutional investors were net buyers at a combined net 261.9 billion won, while retail investors sold off a net 297.2 billion won.

"Some 70 percent of Wednesday's rise was from Samsung Electronics and SK hynix. Foreign investors bought some 160 billion won worth of the two companies," said analyst Lee Kyoung-min from Daishin Securities.

"The two were also boosted by news that China could pause its massive investments for homegrown chipmakers," he said.

In Seoul, most market heavyweights in the semiconductor sector closed higher following news the Korean government plans to expand tax benefits to companies in the sector.

The government announced Tuesday it will expand tax incentives to strategic industries, including semiconductors and batteries, from the current 8 percent to 15 percent.

Samsung Electronics jumped 4.33 percent to 57,800 won, and chipmaker SK hynix surged 7.14 percent to 81,000 won.

Battery maker LG Energy Solution was up 0.57 percent at 443,000 won, bio firm Celltrion added 0.94 percent to 160,500 won, and automaker Hyundai Motor advanced 0.94 percent to 160,500 won.

Food and confectionary makers lost ground. Food maker CJ CheilJedang dropped 5.42 percent to 349,000 won, and instant noodle maker Nongshim fell 3.57 percent to 338,000 won.

The local currency closed at 1,271.7 won against the dollar, up 0.7 won from the previous session's close.

The Kosdaq increased 8.72 points, or 1.29 percent, to close at 683.67 points.

Bond prices, which move inversely to yields, closed higher. The yield on three-year government bonds decreased 2.7 basis points to 3.632 percent, and the yield on the benchmark 10-year government bonds decreased 13.1 basis points to 3.746 percent.

BY SEO JI-EUN, YONHAP [seo.jieun1@joongang.co.kr]