Seoul shares rise for 6th day on US rate cut hopes

Seoul shares closed higher Tuesday to extend their winning streak to a sixth day, driven by hopes for further US rate cuts and China's stimulus plan. The local currency rose against the US dollar.

The benchmark Korea Composite Stock Price Index added 1.14 percent, or 29.67 points, to 2,631.68.

Trading volume was slim at 345.9 million shares worth 10.1 trillion won ($7.6 billion), with gainers surpassing decliners 605 to 264.

Institutions bought 561.6 billion won worth of local shares to offset foreign and retail investors' combined sales of 578.2 billion won.

Overnight, major US indexes gained ground as a number of the Federal Reserve's policymakers voiced support for more rate cuts in the future.

Last week, the Fed cut its lending rate by half a percentage point to a range of 4.75 percent to 5 percent and also pledged further rate cuts.

"Investors' sentiment was lifted by a US rate cut and China's announcement of its plan to lower its interest rates," said Lee Kyoung-min, an analyst at Daishin Securities.

Earlier in the day, China's central bank unveiled its financial stimulus package to tackle deflation, including liquidity injections and rate cuts.

Lee also said investors are paying attention to the launch of Korea Exchange's value-up index later this month.

In Seoul, market bellwether Samsung Electronics gained 0.96 percent to 63,200 won, and its chipmaking rival SK hynix increased 0.93 percent to 163,500 won.

Battery makers rallied to reflect Tesla's 4.93 percent jump overnight.

Industry leader LG Energy Solution soared 4.03 percent to 413,000 won, and its smaller rival Samsung SDI advanced 2.24 percent to 387,500 won. Posco Future M also shot up 4.58 percent to 251,000 won.

Top chemical producer LG Chem also rallied 8.46 percent to 346,000 won.

Auto shares also gained ground, with Hyundai Motor up 1.61 percent to 253,000 won and Kia up 0.58 percent to 103,800 won.

But financial shares lost ground ahead of the launch of the value-up index.

KB Financial slid 3.53 percent to 82,000 won, and Hana Financial plunged 3.4 percent to 59,600 won.

The local currency was trading at 1,334.90 won against the greenback as of 3:30 p.m., up 1.0 won from the previous session.

Bond prices, which move inversely to yields, closed higher. The yield on three-year Treasurys fell 1.0 basis point to 2.854 percent, and the return on the benchmark five-year government bonds edged down 0.1 basis point to 2.903 percent. (Yonhap)