Kospi closes up 0.25% after Fed chair signals rate cut on the table

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Kospi closes up 0.25% after Fed chair signals rate cut on the table

Published: 01 Aug. 2024, 16:22

KIM JU-YEON
kim.juyeon2@joongang.co.kr

A screen in Hana Bank's trading room in central Seoul shows the Kospi closing at 2,777.68 points on Thursday, up 0.25 percent, or 6.99 points, from the previous trading session. [YONHAP]

Shares increased for two straight sessions Thursday driven by the U.S. Federal Reserve's strong signal for a rate cut. The local currency sharply rose in value against the dollar.

The Kospi increased 6.99 points, or 0.25 percent, to close at 2,777.68, following a 1.19 percent rise the previous day.

The Kosdaq rose 10.38 points, or 1.29 percent, to 813.53.

Trade volume was moderate at 463.9 million shares worth 10.6 trillion won ($7.75 billion), with gainers outnumbering losers 632 to 247. Foreign investors led the bullish market, scooping up a net 442 billion won worth of local shares, while institutions dumped a net 175.2 billion won and individuals sold a net 300.6 billion won.

At its rate-setting meeting Wednesday, the U.S. central bank froze its key rate in the 5.25-5.50 percent range.

Chair Jerome Powell said in a press conference that a reduction in the policy rate "could be on the table" at its upcoming meeting next month if inflation continues to fall.

In Seoul, most shares ended in positive territory.

Battery shares were strong as LG Energy Solution rose 2.93 percent to 333,500 won and Samsung SDI jumped 4.54 percent to 334,000 won.

Steelmaker Posco Holdings advanced 3.13 percent to 362,500 won, and zinc smelter Korea Zinc gained 1.03 percent to 489,000 won.

Hyundai Motor rose 1.81 percent to 253,500 won while Kia stayed flat at 112,100 won.

Shipbuilders were also among big winners, with Hanwha Ocean vaulting 6.71 percent to 32,600 won and HD Korea Shipbuilding & Offshore Engineering increasing 2.9 percent to 213,000 won.

But chipmakers finished lower. Samsung Electronics fell 0.95 percent to 83,100 won, and SK hynix declined 0.67 percent to 193,300 won.

Pharmaceutical firm Celltrion shed 2.2 percent to 200,000 won.

The local currency was trading at 1,366.2 won against the dollar as of 3:30 p.m., down 10.3 won from the previous session.

Bond prices, which move inversely to yields, closed higher. The yield on three-year government bonds fell 3.0 basis points to 2.976 percent, and the return on the benchmark U.S. 10-year bonds fell 10.4 basis points to 4.031 percent.

BY KIM JU-YEON, YONHAP [kim.juyeon2@joongang.co.kr]