Seoul: Stocks end higher as Fed decision calms nerves

[SEOUL] South Korean shares rose on Thursday (Dec 16) as the US Federal Reserve signalled its inflation target has been met and it would end its pandemic-era bond purchases, lifting risk appetite. The Korean won strengthened, while the benchmark bond yield fell.

The benchmark Kospi closed up 17.02 points, or 0.57 per cent, at 3,006.41, extending gains to a second day.

Chip giants led the gains with Samsung Electronics and SK Hynix rising 0.26 per cent and 0.4 per cent, respectively, while biopharmaceutical firm Samsung Biologics added 5.97 per cent.

The Fed said it would begin raising interest rates as much as 3 times next year as the economy nears full employment and the US central bank copes with a surge of inflation.

At home, the Bank of Korea governor said he sees the increasing threat of inflation taking hold in the economy and left the door open for an interest rate hike as early as January in a press conference on the central bank's biannual review of inflation.

The country said it will reinstate stricter social distancing rules after easing them under a "living with Covid-19" policy, as the number of new infections and serious cases spirals.

On the main Kospi board, foreigners bought net 183.1 billion won (S$211.3 million) worth of shares.

The won ended at 1,183.9 per dollar on the onshore settlement platform, 0.11 per cent higher than its previous close.

In offshore trading, the won was quoted at 1,183.8 per dollar, up 0.1 per cent from the previous day, while in non-deliverable forward trading its 1-month contract was quoted at 1,182.9.

In money and debt markets, December futures on 3-year treasury bonds rose 0.15 point to 109.28.

The benchmark 10-year yield fell by 1.7 basis points to 2.149 per cent.

REUTERS