SEOUL– South Korean stocks gained for a second consecutive day Wednesday amid hope that China could ease COVID-19 restrictions, with eyes on U.S. Federal Reserve Chair Jerome Powell’s upcoming speech on the economy. The local currency rose against the U.S. dollar.
The benchmark Korea Composite Stock Price Index (KOSPI) advanced 39.14 points, or 1.61 percent, to close at 2,472.53. Trading volume was heavy at 564.2 million shares worth 11.3 trillion won (US$8.57 billion) with gainers outnumbering decliners 626 to 234.
“Chinese authorities’ announcement yesterday fell short of expectations about the reopening, but Beijing has been signaling an acceleration in its push to ease the lockdowns,” Kiwoom Securities analyst Han Ji-young said.
“The impact on the market will be short-term,” Han added.
On Tuesday, China’s health officials said the country would implement COVID-19 rules more flexibly and respond to urgent concerns raised by the public, amid escalating protests against strict virus curbs in the industrial hub of Guangzhou.
Foreigners bought a net 990.9 billion won worth of shares on KOSPI, the largest amount since May 31. Institutions and individuals sold off a net 365.1 billion won and a net 604.2 billion won, respectively.
Powell is scheduled to speak on the economic outlook at a Brookings Institution session on Wednesday (U.S. time). He is likely to give a guideline on when the U.S. central bank will start to scale back the rate hike.
The Fed has raised the interest rate by 75 basis points four times in its aggressive monetary tightening aimed at reining in decades-high inflation.
Analysts have largely priced in for the Fed’s scale-down of the rate hike to 50 basis points in December at the next policy meeting.
In Seoul, most major shares finished higher. Tech behemoth Samsung Electronics jumped 2.6 percent to 62,200 won and top battery maker LG Energy Solution soared 2.5 percent to 587,000 won.
No. 1 steelmaker POSCO Holdings rose 2 percent to 299,500 won and LG Electronics shot up 4 percent to 97,600 won.
Biopharmaceutical giant Celltrion slipped 0.3 percent to 176,000 won, with chemical producer POSCO Chemical losing 1.8 percent to 218,500 won.
Shares in Doosan Bobcat, a construction power equipment maker, plunged 14 percent to 35,550 after four local brokerage firms unloaded all of their holdings in the company in block deals before the opening bell.
The Korean won ended at 1,318.80 won against the U.S. dollar, up 7.8 won from Tuesday’s close.
Bond prices, which move inversely to yields, closed higher. The yield on three-year Treasurys slid 3.4 basis points to 3.689 percent and the return on the benchmark five-year government bonds fell 2.6 basis points to 3.697 percent.
Source: Yonhap News Agency