Seoul: South Korean stocks jumped more than 1 percent Monday after Federal Reserve Chair Jerome Powell hinted at a possible rate cut during the U.S. bank's meeting next month. The local currency sharply gained against the U.S. dollar. The benchmark Korea Composite Stock Price Index (KOSPI) added 41.13 points, or 1.3 percent, to close at 3,209.86, extending its winning streak to a third day.

According to Yonhap News Agency, trade volume was light at 217.3 million shares worth 7.91 trillion won (US$5.71 billion), with gainers beating winners 598 to 271. Foreigners bought a net 26.7 billion won, while individuals offloaded a net 386.9 billion won. Institutions purchased a net 251.9 billion won.

Last week, Powell hinted at a possible cut at the Federal Open Market Committee meeting in September, noting "With policy in restrictive territory, the baseline outlook and the shifting balance of risks may warrant adjusting our policy stance." Investors also awaited the outcome of the summit between Seoul and Washington slated for Monday (U.S. time), with South Korea business tycoons widely expected to unveil investment pledges on the sideline of the meeting.

"Reflecting hopes for industrial cooperation (between South Korea and the United States), nuclear energy, chip and pharmaceutical shares gained ground," Lee Kyoung-min, an analyst at Daishin Securities, said. Top tech giant Samsung Electronics rose 0.14 percent to 71,500 won, and SK hynix soared 3.39 percent to 259,500 won.

Battery makers were also among major winners, with LG Energy Solution jumping 3.4 percent to 380,000 won and Samsung SDI gaining 2.55 percent to 221,500 won. Nuclear power plant builder Doosan Enerbility jumped 5.95 percent to 65,900 won. Pharmaceutical company Celltrion rose 0.29 percent to 174,300 won and Hanmi Pharm added 2.47 percent to 290,000 won.

Financial firms also traded bullish amid the rate cut hope. KB Financial added 1.75 percent to 110,300 won and Hana Financial gained 0.36 percent to 82,600 won. The local currency was quoted at 1,384.7 won against the greenback at 3:30 p.m., up 8.5 won from the previous session.