Seoul shares snap 4-day losing streak on dip buying ahead of earnings season

South Korean stocks bounced back Tuesday, snapping a four-day losing streak, as investors scooped up oversold stocks ahead of the quarterly earnings season. The local currency fell against the US dollar.

The Korea Composite Stock Price Index (KOSPI) closed up 41.44 points, or 1.8 percent, to 2,341.78. The KOSPI slid to a 20-month low Monday. Trading volume was light at 315.7 million shares worth 6.74 trillion won (US$5.18 billion), with advancing stocks far outpacing declining ones 802 to 92.

"The market has recently been marked by a sharp decline, so a rebound is natural to some extent," said Kwak Byeong-ryeol, an analyst at Leading Investment & Securities Co.

"As we enter the second-quarter earnings season and have another FOMC meeting coming up later this month, investors want to search for clues as to whether the market is bottoming out," Kwak said.

The Fed could go ahead with another 0.75 percentage-point rate hike at the forthcoming FOMC, set for July 26-27, to curb decades-high inflation, according to analysts.

But a slew of decelerating US economic indicators has raised expectations the Fed could soften its stance on the aggressive monetary tightening.

Foreigner and institutions were net buyers of local equities on the main Seoul bourse, scooping up a net 135.3 billion won and a net 239.3 billion won, respectively. Individual investors sold off a net 389.5 billion won.

Most large caps finished the session bullish, led by tech and IT blue chips.

Market bellwether Samsung Electronics rose 0.18 percent to 57,200 won, with leading battery maker LG Energy Solution climbing 1.54 percent to 361,500 won.

Internet portal operator Naver advanced 3.4 percent to 243,000 won, with platform giant Kakao jumping 5.73 percent to 72,000 won.

Shares in vaccine maker SK Bioscience spiked 24.87 percent to 122,500 won after a sharp rebound in Tuesday's COVID-19 infections fueled concerns over a resurgence. The daily infection number nearly tripled to over 18,000 on Tuesday from a day earlier.

Automakers and food companies, in contrast, lost ground. Top automaker Hyundai Motor slipped 0.28 percent to 177,500 won and its auto parts making affiliate Hyundai Mobis also fell 0.25 percent to 201,000 won.

CJ Cheiljedang, a major food manufacturer, shed 0.75 percent to 397,500 won.

The local currency ended at 1,300.25 won against the US dollar, down 3.15 won from Monday's close. (Yonhap)