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Stocks surge as investors hope for U.S. rate cut

Published: 07 May. 2024, 17:07 Updated: 07 May. 2024, 18:33

A screen in Hana Bank's trading room in central Seoul shows the Kospi closing at 2,734.36 points on Tuesday, up 2.16 percent, or 57.73 points, from the previous trading session. [NEWS1]

Shares shot up more than 2 percent Tuesday as hopes that the U.S. Federal Reserve might cut rates in 2024 buoyed investors. The local currency gained value against the dollar.

The Kospi jumped 57.73 points, or 2.16 percent, to close at 2,734.36.

Trading volume was moderate at 523 million shares worth 10.9 trillion won ($8 billion), with winners outpacing losers 582 to 285.

Investor sentiment was boosted by growing hopes that the Fed might slash key rates this year following reports that U.S. nonfarm payroll growth had slowed to 175,000 in April.

“The Kospi was able to land above the 2,700 level on the back of gains from Wall Street,” said Han Ji-young, an analyst at Kiwoom Securities.

Korea's financial market was closed Monday due to the observation of Children's Day.

Foreign investors purchased a net 110 billion won worth of local shares, extending their buying spree to a sixth consecutive session. Retail investors offloaded a net 183 billion won while institutions bought a net 77.4 billion won.

Samsung Electronics jumped 4.77 percent to 81,300 won, and SK hynix soared 3.7 percent to 179,600 won. LG Energy Solution climbed 0.13 percent to 391,500 won.

Carmakers finished bullish as well, with Hyundai Motor rising 0.41 percent to 242,000 won and Kia gaining 1.58 percent to reach 115,700 won. Hyundai Mobis climbed 1.11 percent to 228,500 won.

Financial firms were also among the major winners, with Samsung Life Insurance advancing 5.37 percent to 88,300 won and KB Financial Group moving up 0.27 percent to 73,900 won.

Samsung Biologics added 1.82 percent to 785,000 won, and Celltrion increased 2.86 percent to 194,400 won.

The local currency closed at 1,360.1 won against the greenback, down 2.7 won from the previous session's close.

The Kosdaq gained 5.67 points, or 0.66 percent, to close at 871.26.

Bond prices, which move inversely to yields, closed higher. The yield on three-year government bonds fell 5.0 basis points to 3.449 percent, and the return on benchmark U.S. 10-year government bonds dropped 2.8 basis points to 4.486 percent.

BY CHOI HAE-JIN, YONHAP [[email protected]]