Seoul:Seoul shares ended significantly higher for the second consecutive session, driven by a rally in technology stocks amid ongoing concerns over potential aggressive monetary tightening by the Federal Reserve due to unexpectedly high U.S. inflation.
According to Yonhap News Agency, the benchmark Korea Composite Stock Price Index (KOSPI) rose by 136.23 points, or 2.6 percent, closing at 5,375.36. This rise came despite an initial opening 0.56 percent lower, and the index reached a high of 5,377.99 during the session. Trade volume was noted to be light, with 219 million shares worth 16.3 trillion won changing hands, and gainers surpassing losers by a count of 573 to 295.
Foreign investors were net buyers, purchasing 655.26 billion won worth of stocks, while institutions and individual investors were net sellers, offloading 481.67 billion won and 715.69 billion won, respectively. The previous session saw the index advance by 4.39 percent, influenced by a rally in U.S. tech stocks and declining oil prices.
The local market gains occurred in contrast to overnight losses on Wall Street, where the Dow Jones Industrial Average declined by 0.3 percent and the tech-heavy Nasdaq composite fell by 0.74 percent. Comments from former President Trump suggesting a reduced likelihood of military action against Iran contributed to lower oil prices, while bargain hunting in artificial intelligence-related stocks also supported the market, as noted by Hyundai Motor Securities.
U.S. consumer prices showed a 0.3 percent increase in October compared to the previous month, surpassing market expectations and raising concerns about the Federal Reserve potentially adopting a more aggressive approach to monetary tightening to control inflation. Additionally, investor attention is shifting towards the upcoming initial public offering (IPO) of Anthropic next week.
In Seoul, technology and defense stocks were at the forefront of the gains. Samsung Electronics saw an increase of 3.57 percent to 206,000 won, with SK hynix rising 5.36 percent to 1.28 million won. Korea Aerospace Industries and LIG Defense & Aerospace also experienced significant gains, climbing 7.71 percent to 109,000 won and 9.73 percent to 372,000 won, respectively. In contrast, Hyundai Motor and Hanjin KAL experienced declines, with Hyundai Motor falling 0.91 percent to 272,500 won and Hanjin KAL plummeting 14.64 percent to 204,000 won.
The Korean won strengthened against the U.S. dollar, quoted at 1,333.6 won compared to the previous session's 1,337.5 won. However, bond prices fell, with the yield on three-year Treasurys increasing by 9.6 basis points to 3.729, and the benchmark five-year government bonds yielding 3.810, a rise of 9.2 basis points.