Seoul: Shares end firmer as Fed's Powell soothes inflation fears

[SEOUL] South Korean shares posted on Thursday their best day in almost two months, driven by chip heavyweights and foreign buying, after US Federal Reserve chair Jerome Powell's reaffirmation to keep interest rates low boosted risk appetite globally.

The Korean won and the benchmark bond yield strengthened.

The benchmark Kospi closed up 104.71 points or 3.50 per cent at 3,099.69, marking the biggest daily gain since Jan 8, after recovering from a 2.45 per cent decline in the previous session.

Chip giants Samsung Electronics and SK Hynix rose 4.02 per cent and 9.19 per cent, respectively, while Naver and LG Chem added 2.41 per cent and 3.49 per cent.

In a second day of testimony in Washington, Mr Powell reiterated the Fed's promise to get the US economy back to full employment and to not worry about inflation unless prices rose in a persistent and troubling way.

Back home, the Bank of Korea said it was in no rush to remove monetary stimulus even with inflationary expectations on the rise, as the pandemic continues to cloud economic outlook.

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Foreigners were net buyers of 968.4 billion won (S$1.15 billion) worth of shares on the main board.

The won ended at 1,107.8 per dollar on the onshore settlement platform, 0.4 per cent higher than its previous close at 1,112.2.

In offshore trading, the won was quoted at 1,107.7, while in non-deliverable forward trading its one-month contract was quoted at 1,107.4.

The trading volume during the session in the Kospi index was 1,254.54 million shares. Of the total traded issues of 911, the number of advancing shares was 805.

The most liquid three-year Korean treasury bond yield fell by 1.4 basis points to 0.992 per cent, while the benchmark 10-year yield rose by 4 basis points to 1.891 per cent.

REUTERS