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Shares surge as Fed officials signal no rate hike

Published: 11 Oct. 2023, 17:39

KIM JI-YE
[email protected]

Screens in Hana Bank's trading room in central Seoul show the Kospi closing at 2,450.08 points on Wednesday, up 1.98 percent, or 47.50 points, from the previous trading session. [NEWS1]

Shares shot up nearly two percent Wednesday as investors have accepted comments from Federal Reserve officials that the U.S. central bank may not raise rates again this year. The won sharply fell against the dollar.

The Kospi rose 47.50 points, or 1.98 percent, to close at 2,450.08.

The secondary Kosdaq surged 22.12 points, or 2.78 percent, to close at 817.12.

Trading volume was moderate at 436.76 million shares worth 8.57 trillion won ($6.4 billion), with gainers outpacing losers 709 to 180.

Institutions bought a net 620.84 billion won worth of stocks, offsetting foreigners and individuals' combined stock selling valued at 630 billion won.

Overnight, the Dow Jones Industrial Average rose 0.4 percent to 33,739.30, and Nasdaq composite gained 0.6 percent to 13,562.84.

Fed officials have begun to acknowledge a lesser need for further rate hikes, given the current economic conditions, which buoyed U.S. stocks, analysts said.

Traders have expected another rate hike this year due to higher-than-expected U.S. employment data in September, and they are now keeping a close eye on developments in the Israel-Palestine conflict for cues in reorganizing their investment portfolios.

In Seoul, large-cap stocks advanced across the board.

Samsung Electronics jumped 2.7 percent to 68,200 won, Samsung SDI jumped 4.3 percent to 511,000 won, Hyundai Motor gained 0.5 percent to 189,400 won, and LG Energy Solution jumped 7.3 percent on strong earnings guidance.

In the July-September period, LG Energy Solution posted an estimated operating profit of 731.2 billion won, jumping 40 percent from a year earlier, helped by strong demand in the U.S. market.

From oil stocks, Korea Petroleum jumped 13.58 percent to 14,300 won and Kukdong Oil and Chemicals dropped 5.23 percent to 4,350 won.

Among decliners, Korean Air fell 0.2 percent to 20,450 won, Amorepacific declined 1.6 percent to 113,900 won, and Korea Gas shed 1 percent to 23,800 won.

The local currency ended at 1,338.70 won against the greenback, down 10.80 won from the previous session's close.

Bond prices, which move inversely to yields, closed higher. The yield on three-year government bonds fell 2.7 basis points to 3.96 percent, and the return on the benchmark U.S. 10-year government bonds fell 14.0 basis points to 4.662 percent.

BY KIM JI-YE, YONHAP [[email protected]]