Seoul: Stocks end at 3-week high as Fed comments calm rate hike fears

[SEOUL] South Korean shares ended at a 3-week high on Thursday (Mar 3), following overnight Wall Street gains after US Federal Reserve Chairman Jerome Powell's remarks assuaged fears of aggressive rate hikes. The Korean won strengthened, while the benchmark bond yield rose.

The benchmark Kospi ended up 43.56 points, or 1.61 per cent, at 2,747.08, rallying for a fourth straight session to close at its highest since Feb 11.

Leading gains, chip giants Samsung Electronics and SK Hynix soared 1.67 per cent and 3.2 per cent, respectively, while battery maker LG Energy Solution added 0.69 per cent.

Powell on Wednesday said he was "inclined to propose and support a 25 basis point rate hike" when policymakers meet in 2 weeks, ruling out the prospect of the feared 50 basis points increase before Russia's invasion of Ukraine.

Powell, however, said the central bank is prepared to move more aggressively later if inflation does not abate as expected.

"Worries about an extreme tightening by the United States have eased, while strict sanctions against Russia by the international community lowered the possibilities of Ukraine crisis worsening," said Bookook Securities' analyst Lee Won.

Foreigners were net buyers of 133.8 billion won (S$150.5 million) worth of shares on the main board.

The won closed at 1,204.6 per dollar on the onshore settlement platform, 0.12 per cent higher than its previous close.

In offshore trading, the won was quoted at 1,205 per dollar, down 0.2 per cent from the previous day, while in non-deliverable forward trading its 1-month contract was quoted at 1,205.6.

In money and debt markets, March futures on 3-year treasury bonds fell 0.05 point to 108.18.

The most liquid 3-year Korean treasury bond yield rose by 1.5 basis points to 2.202 per cent, while the benchmark 10-year yield rose by 3.7 basis points to 2.65 per cent. REUTERS