Seoul: Stocks end higher as Powell calms markets; Naver, Kakao lead gains

[SEOUL] South Korean shares rose on Wednesday, with tech giants Naver and Kakao tracking overnight Wall Street gains, as investors cheered the US Federal Reserve's pledge to not raise rates too soon, easing fears of any hindrance to the pace of economic recovery. The won and benchmark bond yield weakened.

The benchmark Kospi closed up 12.31 points or 0.38 per cent at 3,276.19. The index closed 0.71 per cent higher on Tuesday.

Heavyweights Naver and mobile messenger app operator Kakao surged 8.31 per cent and 6.60 per cent, respectively, leading the benchmark gains, as top-shelf tech companies on Nasdaq resumed their growth trajectories.

Federal Reserve Chair Jerome Powell reaffirmed the US central bank's intent to encourage a "broad and inclusive" recovery of the job market and not to raise interest rates too quickly based only on the fear of coming inflation.

Korean chip giants Samsung Electronics and SK Hynix added 0.13 per cent and 1.64 per cent, respectively.

Foreigners were net sellers of 8.1 billion won (S$9.6 million) worth of shares on the main board.

"Monetary policy uncertainties eased after Powell vowed to not raise rates too quickly ... Naver, Kakao, Celltrion and Samsung Biologics towed Kospi gains but strong dollar has kept foreign investors away," said Lee Kyoung-min, an analyst at Daishin Securities.

Korean finance minister Hong Nam-ki said the planned supplementary budget, the second of this year, is expected to be worth more than 30 trillion won.

The won ended at 1,137.7 per dollar on the onshore settlement platform, 0.51 per cent lower than its previous close at 1,131.9.

In offshore trading, the won was quoted at 1,136.5, while in non-deliverable forward trading its one-month contract was quoted at 1,136.4.

In money and debt markets, September futures on three-year treasury bonds rose 0.06 point to 110.32.

The benchmark 10-year yield fell by 0.9 basis point to 2.041 per cent.

REUTERS