Seoul shares spike 3% on Bernanke remarks

South Korean stocks shot up nearly 3 percent Thursday as U.S. Federal Reserve Chairman Ben Bernanke's dovish comments backing the monetary easing fueled investor sentiment, analysts said. The local currency gained sharply against the U.S. dollar.

The benchmark Korea Composite Stock Price Index (KOSPI) jumped 53.44 points, or 2.93 percent, to finish at 1,877.60, the highest in 16 trading days. Trading volume was moderate at 327.3 million shares worth 3.93 trillion won (US$3.48 billion) with gainers far outnumbering decliners 659 to 157.

"Bernanke's words were certainly powerful enough to ease market jitters about the Fed's stimulus cut. It will drive up local equities as new momentum," said Lee Kyung-min, an analyst at Woori Investment & Securities Co.

Foreigners turned to net sellers in six days, snapping up a net 275.0 billion won. Institutions also bought a net 303.1 billion won, lending support to the KOSPI's sharp gain.

Most shares ended the session bullish, led by large-cap tech firms and machineries. Market bellwether Samsung Electronics spiked 5.13 percent to 1,312,000 won, with Doosan Infracore, a leading construction equipment maker skyrocketing 8.92 percent to 11,600 won.

Financial issues fared well. No. 3 lender Hana Financial Group climbed 4.51 percent to 33,600 won, with state-run banking giant Woori Financial Holdings advancing 5.61 percent to 11,300 won.

The local currency gained sharply against the greenback, ending up 13.7 won to 1,122.10 won from the previous day, as Bernanke's remarks stirred up the dollar to fall, dealers said.

Bond prices, which move inversely to yields, closed sharply higher. The yield on three-year Treasuries fell 0.1 percentage point to 2.84 percent and the return on the benchmark five-year government bonds tumbled 0.14 percentage point to 3.10 percent. (Yonhap News)