SEOUL-- Seoul shares closed up for the eighth consecutive session on Friday as weak inflation data in the United States bolstered expectations for the Federal Reserve to slow the pace of monetary tightening. The Korean won rose against the U.S. dollar.
The benchmark Korea Composite Stock Price Index (KOSPI) added 20.99 points, or 0.89 percent, to close at 2,386.09 points.
Trading volume was moderate at about 851 million shares worth some 6.9 trillion won (US$5.6 billion), with gainers outnumbering losers 524 to 325.
Institutions bought a net 215 billion won and foreigners purchased 568 billion won, while retail investors offloaded 780 billion won in net value.
Stocks got off to a strong start buoyed by overnight gains on Wall Street.
The tech-heavy Nasdaq composite and the Dow Jones Industrial Average both closed up 0.64 percent as the U.S. consumer price index, a key gauge for inflation, rose at a slower-than-expected pace in December, fueling expectations that the Fed may go easy on its monetary tightening.
The KOSPI's gain came despite the Bank of Korea's decision to raise its policy interest rate by 0.25 percentage point to 3.5 percent. BOK Gov. Rhee Chang-yong voiced concerns about slowing economic growth and market watchers saw it as a signal for pausing tightening in the months to come.
"Local stocks seem to have fared strong on the latest CPI data (in the U.S.) and a weak dollar," Kiwoom Securities analyst Han Ji-young said.
In Seoul, most large cap shares closed higher amid strong foreign and institutional buying.
Market bellwether Samsung Electronics gained 0.5 percent to 60,800 won, while SK hynix lost 1.27 percent to 85,700 won. Major chemical firm LG Chem rose 1.1 percent to 644,000 won.
Portal operator Naver added 0.52 percent to 195,000 won, leading carmaker Hyundai Motor advanced 1.5 percent to 169,000 won, and steel giant POSCO Holdings jumped 4.81 percent to 305,000 won.
The local currency closed at 1,241.3 won against the dollar, up 4.5 won from the previous session's close.
Bond prices, which move inversely to yields, closed higher. The yield on three-year Treasurys lost 9.7 basis points to 3.369 percent, and the return on the benchmark five-year government bonds fell 12.8 basis points to 3.275 percent.
Source: Yonhap News Agency