Seoul shares up for 3rd session amid expectation for less aggressive US rate hike

South Korean stocks rose by almost 1.5 percent to close up for a third consecutive session Tuesday, driven by bullish chemicals and auto shares, amid growing expectations the US Federal Reserve will go easy on its aggressive rate hikes. The local currency fell against the US dollar.

The benchmark Korea Composite Stock Price Index advanced 35.78 points, or 1.42 percent, to close at 2,547.86. Trading volume was high at 756.6 million shares worth 13.9 trillion won ($10.5 billion), with gainers outstripping decliners 684 to 202.

"US stocks managed to erase earlier losses amid psychological market stability despite the US economic data that showed signs of a slowdown, and that gave a positive impact on the local stock markets," Seo Sang-young, an analyst at Mirae Asset Securities Co., said.

Wall Street closed mixed Monday, with the S&P 500 and the Dow Jones ekeing out a gain and the tech-laden Nasdaq ending almost flat.

Market watchers are increasingly betting the Fed will raise the interest rate by 0.25 basis point at its policy meeting in May, following US jobs data pointing to robust employment growth in March.

The US consumer price index, a key gauge for the Fed's monetary policy, is also due on Wednesday.

Also, investor sentiment was bouyed after the Bank of Korea held its key interest rate steady at 3.5 percent for the second straight time, as inflation appears to be easing and concerns are rising over an economic slowdown.

In Seoul, top secondary battery maker LG Energy Solution rose 2.35 percent to 610,000 won, with its parent LG Chem soaring 7.47 percent to 806,000 won, on prospects for benefits from the new US law on giving subsidies for electric vehicle purchases.

Leading automaker Hyundai Motor gained 3.34 percent to 192,100 won, and its affiliate Kia jumped 4.94 percent to 85,000 won on positive earnings outlook for this year.

Tech heavyweight Samsung Electronics finished up 0.3 percent to 65,900 won. Chip giant SK hynix also closed 1.21 percent higher to 91,800 won.

In contrast, LG Electronics, a major home appliance maker, fell 0.35 percent to 112,600 won. Internet-only bank KakaoBank slid 2.61 percent to 22,350 won, and Hanwha Solutions, a petrochemical and solar energy company, also lost 1.33 percent to 52,000 won.

The local currency ended at 1,322.20 won against the US dollar, down 2.5 won from Monday's close. (Yonhap)