Stocks rebound, rising 0.72 percent, as China cuts rate

Stocks rebounded Thursday as investors moved to buy oversold stocks after the recent stock plunge and China's interest rate cut.

A screen in Hana Bank's trading room in central Seoul shows the Kospi closing at 2,862.68 points on Thursday, up 20.40 points, or 0.72 percent, from the previous trading day. [YONHAP]

Stocks rebounded Thursday as investors moved to buy oversold stocks after the recent stock plunge and China's interest rate cut. The won fell against the dollar.

The benchmark Kospi rose 20.4 points, or 0.72 percent, to close at 2,862.68 points.

Trading volume was moderate at about 388 million shares worth some 8.7 trillion won ($7.3 billion), with gainers outnumbering losers 709 to 174.

Institutions bought a net 106 billion won and retail investors purchased 145 billion won, while foreigners sold 275 billion won.

Stocks edged up after a choppy start, following the key stock index's four-day losing streak that stemmed from concerns about high inflation rates.

The Kospi gained ground in the afternoon on reports China cut its key borrowing rates to relieve the liquidity crunch.

"It was a rare call for China to cut lending rates for two straight months. Investors in Asia seem to have taken the move as a signal Beijing is making extra efforts to support the economy," said Eugene Investment & Securities analyst Huh Jae-hwan.

Most large caps closed higher in Seoul.

Samsung Electronics increased 0.26 percent to 76,500 won, while chipmaker SK hynix decreased 1.57 percent to 125,000 won.

Battery maker LG Chem surged 6.58 percent to 696,000 won, and Samsung SDI jumped 4.08 percent 688,000 won.

Pharmaceutical company Samsung Biologics closed unchanged at 816,000 won, and Celltrion dropped 1.20 percent to 165,000 won.

Carmaker Hyundai Motor gained 0.75 percent to 202,000 won and its affiliate Kia rose 0.25 percent to 81,200 won.

Internet portal operator Naver increased 0.75 percent to 335,000 won, and Kakao rose 2.10 percent to 92,300 won.

The local currency closed at 1,192.4 won against the dollar, up 0.7 won from the previous session's close.

The Kosdaq gained 24.80 points, or 2.66 percent, to close at 958.70.

Bond prices, which move inversely to yields, closed mixed. The yield on three-year government bonds rose 4.6 basis points to 2.119 percent, and the yield on the benchmark 10-year government bond lost 0.7 basis point to 1.86 percent.

BY SHIN HA-NEE, YONHAP [shin.hanee@joongang.co.kr]