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Seoul shares rise to 2-month high amid inflation, rate hike uncertainties

All News 16:05 August 09, 2022

SEOUL, Aug. 9 (Yonhap) -- South Korean stocks closed moderately higher Tuesday to extend their winning streak to a fifth day, as investors keep a wary eye on upcoming U.S. inflation data that might offer a clue as to the Federal Reserve's next move in its monetary policy. The local currency inched up against the U.S. dollar.

After choppy trading, the Korea Composite Stock Price Index (KOSPI) rose 10.36 points, or 0.42 percent to 2,503.46, the highest since June 13 when the index ended at 2,504.51. Trading volume was moderate at 446.4 million shares worth 8.74 trillion won (US$6.69 billion) with gainers outstripping decliners 422 to 412.

"Stocks moved range-bound as investors took a cautious approach ahead of the U.S. consumer price index announcement, despite some positive macro indicators, such as the inflation expectations and the won's recent gain," said Han Ji-young, an analyst at Kiwoom Securities Co.

U.S. stocks closed almost flat on Monday (local time) after the country reported robust jobs data, a possible indication that the Fed could go ahead with a sharp rate hike in the September policy meeting to tame decades-high inflation.

The Federal Reserve Bank of New York lowered the inflation expectations to 6.2 percent from 6.8 percent for the next 12 months.

The U.S. consumer price data, set to be released Wednesday, is expected to provide a further clue as to whether the Fed will go easy in the aggressive monetary tightening.

Seoul stocks turned to positive territory toward the closing bell, led by foodmakers and materials companies.

Top foodmaker CJ Cheiljedang soared 8.62 percent to 428,500 won and POSCO Chemical jumped 5.57 percent to 151,500 won, both on the back of strong quarterly earnings.

Battery makers also finished bullish. LG Energy Solution climbed 2.35 percent to 457,500 won, with Samsung SDI gaining 3.02 percent to 615,000 won, after the U.S. Senate' approval of a major bill aimed at curbing greenhouse gas emissions, a boon for South Korean energy companies focused on secondary battery and other eco-friendly energy sources.

But tech blue-chips ended lower. Market heavyweight Samsung Electronics fell 1.32 percent to 60,000 won on dimmer prospects after U.S. chipmaker Nvidia Corp. said it expects a 19-percent on-quarter decline in the second quarter revenue. Nvidia's shares tumbled more than 6 percent on Nasdaq on Monday.

The local currency ended at 1,304.60 won against the U.S. dollar, up 1.8 won from Monday's close.


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