South Korean stocks closed 0.64 percent higher Wednesday as the U.S. Federal Reserve highlighted the necessity to maintain its quantitative easing, boosting investor sentiment here, analysts said. The local currency fell against the U.S. dollar.
The benchmark Korea Composite Stock Price Index (KOSPI) moved up 12.74 points to finish at 1,993.83. Trading volume was low at 321.7 million shares worth 4.45 trillion won ($4 billion) with gainers outstripping losers 451 to 348.
"Seoul shares traded higher as investors' appetite for riskier assets grew on the eased concerns over the phase-out of U.S. quantitative easing," said Cho Seong-jun, an analyst at NH Investment & Securities.
U.S. stocks ended higher on Tuesday as some officials from the Federal Reserve emphasized the importance of the stimulus measure, with the Dow Jones industrial average rising 0.34 percent and the NASDAQ composite index moving up 0.16 percent.
"Foreign investors also added vitality to the market by scooping up local shares while the negative impact caused by Vanguard Group's move to change its benchmark index tapered off," said Han Beom-ho, an analyst at Shinhan Investment Corp.
U.S. fund manager Vanguard Group switched the index provider for its funds in January, which sparked concerns that there would be an outflow of foreign funds from the local market as it excludes the South Korean bourse in the benchmark portfolio.
Foreign investors became net buyers of local shares for the fourth consecutive session at 134.7 billion won, and institutions also scooped up a net 230.9 billion won. Individuals, however, offloaded more shares than they purchased at a net 230.9 billion won.
Leading chipmaker SK hynix climbed 2.29 percent to reach 31,300 won on the improved outlook over its earnings down the road. Market behemoth Samsung Electronics advanced 1.14 percent to 1,509,000 won.
Carmakers closed bullish, with No. 1 player Hyundai Motor adding 1.76 percent to 202,000 won and its smaller affiliate Kia Motors rising 4.58 percent to 57,100 won. Top auto parts maker Hyundai Mobis also added 3.11 percent to 282,000 won.
Builders gathered ground with leading Hyundai Engineering & Construction advancing 0.63 percent to 63,400 won and Daewoo Engineering & Construction moving up 0.25 percent to 7,930 won. Top steelmaker POSCO climbed 1.56 percent to 326,000 won.
In contrast, affiliates of CJ Group traded lower as prosecutors raided the conglomerate as part of an investigation into allegations that the food and entertainment group managed a massive slush fund overseas, with CJ falling 7.2 percent to 122,500 won.
Mobile carriers also closed bearish, with KT falling 0.37 percent to 39,900 won and LG Uplus, the smallest player, losing 2.09 percent to 11,700 won. Leading SK Telecom closed unchanged at 215,000 won.
The local currency ended at 1,114.00 won against the greenback, down 3.40 won from Tuesday's close on the market outlook that the U.S. Federal Reserve may maintain its quantitative easing, dealers said.
Bond prices, which move inversely to yields, closed lower. The yield on three-year Treasuries climbed 0.01 percentage point to
2.61 percent and the return on the benchmark five-year government bonds also advanced 0.01 percentage point to 2.7 percent. (Yonhap News)
