South Korean stocks closed 0.26 percent higher Monday, as investors kept their hopes high about a delay of the U.S. stimulus cut, analysts said. The local currency rose against the U.S. dollar.
The benchmark Korea Composite Stock Price Index (KOSPI) added 5.17 points to finish at 2,010.81. Trading volume was light at 310.3 million shares worth 3.04 trillion won ($2.85 billion) with decliners outpacing gainers 462 to 339.
The main index capped its gains as foreigners and retail investors opted to sell off shares, while institutions were net buyers of local equities and lent support to propping up the KOSPI.
But analysts saw the Monday net selling by foreigners as a one-off factor and agreed to the view that the Seoul bourse is on track for more liquidity inflows, citing the remarks by U.S. Federal Reserve Chair nominee Janet Yellen.
"Yellen stressed the need for a strong economic recovery (in order for the U.S.) to let go of the quantitative easing. This made investors believe the tapering won't start till next year, providing them a favorable market to make more risky bets," said Park Seung-young, an analyst at KDB Daewoo Securities Co.
Overseas investors sold off a net 19.7 billion won, with retail investors offloading a net 40.2 billion won. Institutions snapped up a net 62.6 billion won.
Shares of foodmakers and automobiles drove up the KOSPI.
Leading confectioner Orion gained 1.52 percent to 936,000 won and No. 1 carmaker Hyundai Motor shot up 2.01 percent to 254,000 won.
Top-cap Samsung Electronics finished up 0.82 percent to 1,474,000 won.
But logistics and insurers closed in negative terrain, with top air carrier Korean Air Lines dipping 2.02 percent to 29,050 won and nonlife insurer Samsung Fire & Marine Insurance falling 1.15 percent to 257,000 won.
The local currency ended at 1,057.90 won against the greenback, up 5.5 won from Friday's close, largely due to a weaker dollar following Yellen's dovish remarks on the tapering at the Senate Committee, dealers said. (Yonhap News)
