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Seoul shares spike almost 2% to 2-week high on eased rate hike woes

An electronic board showing the Korea Composite Stock Price Index (Kospi) at a dealing room of the Hana Bank headquarters in Seoul on Monday. (Yonhap)
An electronic board showing the Korea Composite Stock Price Index (Kospi) at a dealing room of the Hana Bank headquarters in Seoul on Monday. (Yonhap)

South Korean stocks soared nearly 2 percent higher Monday, as the US Federal Reserve will unlikely deliver a full-percentage point interest rate hike amid deepening concerns over an economic slowdown. The Korean won gained ground against the US dollar.

The Korea Composite Stock Price Index (KOSPI) rose 44.27 points, or 1.90 percent, to close at 2,375.25. Trading volume was moderate at 318.99 million shares worth 6.99 trillion won ($5.31 billion), with gainers outstripping decliners 778 to 116.

Foreign investors purchased shares worth a net 633.45 billion won, offsetting selling by individuals and retailers of shares worth 426.97 billion won and 200.05 billion won, respectively.

"Recent US data on retail purchases and inflation expectations were not bad, and concerns over sharper-than-expected rate hikes have eased. Strong gains on Wall Street on Friday, as well as the rise in futures, set a positive tone for the local market," Seo Sang-young, an analyst at Mirae Asset Securities Co., said.

Some had forecast that the Fed could raise the key rate by a 1 percentage point to curb high-flying inflation at next week's session, but Fed officials indicated that it would stick to a 75-basis-point rate hike.

US consumers' inflation expectations eased in July on the back of a drop in oil prices, though its consumer price index jumped 9.1 percent on-year in June, the highest in 41 years.

"The market is likely to remain volatile for some time on lingering fears over high inflation and a recession," Seo added.

In Seoul, most big-cap shares ended higher, with major tech and auto shares leading the upturn.

Market behemoth Samsung Electronics soared 3.17 percent to 61,900 won, and No. 2 chipmaker SK hynix jumped 2.33 percent to 101,000 won.

Leading carmaker Hyundai Motor increased 1.09 percent to 185,500 won on upbeat quarterly earnings forecast, and its affiliated Kia added 1.26 percent to 80,100 won.

Internet portal operator Naver spiked 6.71 percent to 246,500 won, and platform giant Kakao climbed 3.85 percent to 72,800 won.

Financials also rose. KB Financial Group soared 4.77 percent to 46,150 won, and Shinhan Financial Group advanced 3.74 percent to 34,650 won.

But leading bio stocks fell, with Samsung Biologics sliding 0.86 percent to 810,000 won and pharmaceutical company Celltrion losing 1.88 percent to 183,000 won.

The local currency ended at 1,317.4 won against the US dollar, up 8.7 won from the previous day's close. (Yonhap)

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