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Seoul: Stocks rally ahead of Fed meeting; won firmer
[SEOUL] South Korean shares rallied on Wednesday morning, supported by a sharp rebound in oil prices and as the market shook off uncertainties ahead of a widely flagged US interest rate rise.
The Korea Composite Stock Price Index (KOSPI) climbed 1.9 per cent to 1,970.13 points as of 0307 GMT.
Top Federal Reserve officials have begun a two-day policy meeting that is expected to end with the first U.S. interest rate increase since 2006.
"Investors are now waiting for commentary from policymakers about what will happen next," said Rhoo Yong-seok, a stock analyst at Hyundai Securities, noting investors will focus on hints about the pace of future rate increases.
Broad gains were seen across the board, as winning shares outnumbered losers by 4-to-1.
Energy counters outperformed the wider market as oil prices rose for a second straight day. SK Innovation Co Ltd and S-Oil Corp leapt 6.2 per cent and 7.4 per cent, respectively.
Brokerages stocks, which will benefit from higher interest rates, were among the market leaders. Hyundai Securities advanced 2.6 per cent and Daewoo Securities gained 4 per cent.
Foreign investors offloaded a net 95.1 billion Korean won ($80.65 million) worth of KOSPI shares near mid-session, poised to be net sellers for an 11th consecutive session.
"Though South Korea could see an outflow of equities from foreigners after a likely rate hike by the Federal Reserve, the amount of selling from them would not increase considerably,"the Financial Services Commission said in a statement.
The South Korean won firmed against the dollar in early trade on short-covering and technical positioning ahead of commentary from Fed officials.
The local currency was quoted at 1,179.4 to the dollar as of 0247 GMT, up 0.3 per cent compared with Tuesday's close of 1,183.4.
March futures on three-year treasury bonds shed 0.06 points to 109.31.