The Korea Herald

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Seoul shares rise over 1% on US rate cut hopes

By Yonhap

Published : June 5, 2024 - 16:11

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An electronic board showing the Korea Composite Stock Price Index at a dealing room of the Hana Bank headquarters in Seoul on Wednesday. (Yonhap) An electronic board showing the Korea Composite Stock Price Index at a dealing room of the Hana Bank headquarters in Seoul on Wednesday. (Yonhap)

South Korean stocks rose more than 1 percent Wednesday backed by gains of chip and battery shares amid hopes for a rate cut by the Federal Reserve. The local currency rose against the US dollar.

The benchmark Korea Composite Stock Price Index rose 27.40 points, or 1.03 percent, to close at 2,689.50.

Trade volume was heavy at 871 million shares worth 13.4 trillion won ($9.76 billion), with gainers far outpacing losers 642 to 226.

Foreign investors bought shares worth a net 589 billion won, while institutions and individuals dumped 586 billion won worth of shares.

Overnight, the US stock market closed higher on softer-than-expected labor market data that bolstered hopes for an interest rate cut by the Fed. Artificial intelligence-related big tech stocks, such as Nvidia, also drove up Wall Street shares.

The Dow Jones Industrial Average added 0.36 percent, while the Nasdaq composite edged up 0.17 percent and the S&P 500 gained 0.15 percent.

Kim Seok-hwan, an analyst at Mirae Asset Securities, said anticipations for a potential collaboration between Samsung Electronics and Nvidia "will serve in favor of the stock market" despite heightened economic uncertainties.

In Seoul, market bellwether Samsung Electronics jumped 2.79 percent to 77,400 won following news that US tech giant Nvidia was considering using the South Korean company's high bandwidth memory chips in its products. Smaller rival SK hynix also added 0.21 percent to 193,700 won.

Battery shares also continued their gains from the previous session. Industry leader LG Energy Solution surged 4.46 percent to 351,500 won and Samsung SDI also jumped 3.57 percent to 391,500 won.

Automakers also enjoyed brisk trading. Hyundai Motor rose 1.93 percent to 264,000 won and affiliate Kia inched up 0.42 percent to 119,500 won.

Refiners, meanwhile, retreated following gains made since the government announced a plan to carry out an oil and gas exploration project in the East Sea. Leading refiner SK Innovation slumped 0.67 percent to end at 103,600 won.

The local currency finished at 1,373 won against the US dollar, up 3 won from the previous session's close.

Bond prices, which move inversely to yields, rose. The yield on three-year Treasurys fell 4.5 basis points to 3.345 percent, and the return on the benchmark five-year government bonds dropped 4.4 basis points to 3.368 percent. (Yonhap)