Stocks end higher Tuesday on expectations Fed will take less-tough stance

A screen in Hana Bank's trading room in central Seoul shows the Kospi closing at 2,388.35 points on Tuesday, up 0.38 percent, or 9.15 points, from the previous trading day. [NEWS1]

Stocks ended higher Tuesday, as fears over a global banking turmoil have somewhat eased and investors expect the Federal Reserve to have a milder tone regarding monetary tightening ahead of its rate-setting meeting, analysts said. The won fell against the dollar.

The benchmark Kospi added 9.15 points, or 0.38 percent, to close at 2,388.35. Trading volume was a bit slim at 345.82 million shares worth 7.14 trillion won ($5.45 billion), with decliners outpacing gainers 456 to 426.

The index opened higher, tracking overnight gains on Wall Street, and managed to have upward momentum throughout the session on growing hopes that the contagion risk in the global financial market sparked by the failure of American lenders earlier this month will not be high amid efforts by governments around the world to stem the spread of the recent turmoil.

Eyes are on the Fed's monetary policy path in the runup to the two-day rate-setting meeting set to begin Tuesday.

"The Fed is widely expected to hike rates by one-quarter of a percentage point this time, and some have stressed the need for freezing the rates," said Noh Dong-kil, an analyst at Shinhan Investment and Securities.

In Seoul, top-cap shares traded mixed.

Samsung Electronics inched up 0.17 percent to 60,300 won, while SK hynix lost 0.12 percent to 83,600 won.

Battery maker LG Energy Solution added 0.37 percent to 546,000 won, and Samsung SDI grew 0.28 percent to 717,000 won. LG Chem sank 0.88 percent to 677,000 won.

Hyundai Motor increased 0.4 percent to 175,800 won, while Kia shed 0.38 percent to 77,700 won.

Bio shares fell. Samsung Biologics dropped 0.37 percent to 809,000 won, and Celltrion tumbled 1.2 percent to 156,000 won.

Naver lost 0.5 percent to 200,500 won, and Kakao shed 0.16 percent to 60,900 won.

The local currency ended at 1,311.2 won against the dollar, up 1.1 won from the previous session's close.

Bond prices, which move inversely to yields, closed lower. The yield on three-year government bonds rose 2.5 basis points to 3.294 percent, and the yield on the benchmark 10-year government bonds climbed 5.5 basis points to 3.484 percent.

BY SOHN DONG-JOO, YONHAP [sohn.dongjoo@joongang.co.kr]