Stocks close higher ahead of Fed rates decision

Stocks closed higher Tuesday as steel and battery stocks continue to rally ahead of the Federal Reserve's two-day rate-setting meeting later in the day. The won rose against the dollar.

Screens in Hana Bank's trading room in central Seoul show the Kospi closing at 2,636.46 points on Tuesday, up 0.3 percent, or 7.93 points, from the previous trading session. [NEWS1]

Stocks closed higher Tuesday as steel and battery stocks continue to rally ahead of the Federal Reserve's two-day rate-setting meeting later in the day. The won rose against the dollar.

The benchmark Kospi added 7.93 points, or 0.3 percent, to close at 2,636.46, the third consecutive rise. Trading volume was a bit heavy at 713.46 million shares worth 18.85 trillion won ($14.77 billion), with losers outpacing gainers 652 to 239.

Individual investors picked up a net 1.37 trillion won worth of shares, while foreign and institutional investors shed a net 1.35 trillion won and 69.76 billion won worth of shares, respectively.

"Investors are assessing various factors as U.S. shares traded higher in recent sessions amid caution over the Federal Reserve's policy direction," said Han Ji-young, an analyst at Kiwoom Securities.

The U.S. central bank is largely expected to raise the key rate by 0.25 percentage points at its Federal Open Market Committee meeting set to begin Tuesday. Investors harbor hopes that this might be the final hike of the Fed's monetary tightening cycle.

In Seoul, steel and chemical firms drove the Kospi up.

Samsung Electronics fell 0.57 percent to 70,000 won, and SK hynix skidded 0.53 percent to 113,400 won.

LG Energy Solution dropped 0.5 percent to 594,000 won, and Samsung SDI ended flat at 712,000 won.

Among gainers, LG Chem grew 1.68 percent to 725,000 won, Hyundai Motor rose 0.65 percent to 200,500 won and Kia went up 1.32 percent to 84,600 won.

Posco Holdings jumped 2.49 percent to 658,000 won, and Posco Future M soared 10.33 percent to 598,000 won after the previous session's sharp gains on upbeat quarterly results.

The local currency ended at 1,275.4 won against the dollar, down 4.5 won from the previous session's close.

Bond prices, which move inversely to yields, closed lower. The yield on three-year government bonds advanced 3.1 basis points to 3.646 percent, and the yield on the benchmark 10-year government bonds climbed 3.0 basis points to 3.869 percent.

BY SOHN DONG-JOO, YONHAP [sohn.dongjoo@joongang.co.kr]