Kospi closes higher on hopes of Fed rate hike pause

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Kospi closes higher on hopes of Fed rate hike pause

Published: 04 Sep. 2023, 17:21

Screens in Hana Bank's trading room in central Seoul show the Kospi closing at 2,584.55 points on Monday, up 0.81percent, or 20.84 points, from the previous trading session. [YONHAP]

Stocks closed higher on Monday on growing hopes for the U.S. Federal Reserve to hold rates steady at its rate-setting meeting in September, as economic data point to slowing inflation. The won fell against the dollar.

The benchmark Kospi advanced 20.84 points, or 0.81 percent, to finish at 2,584.55.

Trading volume was moderate at 337.3 million shares worth 8.57 trillion won ($6.49 billion), with decliners outpacing gainers 432 to 431.

"The latest workforce data offset worries about additional tightening by the Fed," Kiwoom Securities analyst Han Ji-young said.

"The moderate employment data shows that the imbalance in the labor market is easing and that there has been less inflationary pressure on wages," Han added.

The U.S. unemployment rate jumped to 3.8 percent in August, the Labor Department said Friday, while wage growth slowed. In August, nonfarm payrolls rose to187,000, increasing from last month and more than the market had expected.

The fresh readings were interpreted by some investors as an indicator that the Fed's aggressive monetary tightening policy is working, which may prompt the central bank to pause its rate hikes in the September policy meeting.

In Seoul, most large-cap stocks gathered ground.

Samsung Electronics rose 0.3 percent to 71,200 won and LG Energy Solution jumped 1.5 percent to 530,000 won.

Posco Holdings surged 5.4 percent to 590,000 won and Posco Future M gained 2.3 percent to 441,000 won.

Samsung SDI climbed 2.4 percent to 610,000 won and LG Chem rose 2.8 percent to 586,000 won.

Samsung Biologics increased 0.4 percent to 736,000 won and Celltrion grew 1.1 percent to 145,500 won.

Among the decliners, Hyundai Motor lost 0.1 percent to 187,300 won and Naver shed 1.4 percent to 211,500 won.

The local currency closed at 1,319.8 won against the dollar, up 1 won from Friday's close.

Bond prices, which move inversely to yields, closed lower. The yield on three-year government bonds hiked 5.1 basis points to 3.7 percent, and the yield on the benchmark 10-year government bonds advanced 7.5 basis points to 4.2 percent.

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