Korean shares jump 2% after Fed holds key rate steady

Shares soared nearly 2 percent Thursday after the U.S. Federal Reserve held its key rate steady as widely expected overnight. The local currency sharply rose against the dollar.

Screens in Hana Bank's trading room in central Seoul show the Kospi closing at 2,343.12 points on Thursday, up 1.81 percent, or 41.56 points, from the previous trading session. [NEWS1]

Shares soared nearly 2 percent Thursday after the U.S. Federal Reserve held its key rate steady as widely expected overnight. The local currency sharply rose against the dollar.

The Kospi shot up 41.56 points, or 1.81 percent, to close at 2,343.12.

Trading volume was moderate at 370 million shares worth 7.57 trillion won ($5.63 billion), with gainers outnumbering losers 693 to 207.

Foreigners dumped a net 141.3 billion won worth of local shares, and individuals sold a net 438 billion won. Institutions bought a net 273.5 billion won.

Overnight, the Fed held its benchmark lending rate steady at a 22-year high for the second consecutive time as it continues working to bring inflation down to its 2 percent target.

"Seoul shares gained ground on the back of the Fed's less-hawkish-than-expected stance," Han Ji-young, an analyst from Kiwoom Securities, said.

In Seoul, tech giants closed bullish after U.S. chipmaker AMD suggested a rosy outlook over the artificial intelligence chip business, with Samsung Electronics advancing 1.6 percent to 69,700 won. SK hynix rose 4.16 percent to 125,300 won.

Battery makers also finished higher, with LG Energy Solution rising 3.71 percent to 391,500 won, Samsung SDI gaining 5.99 percent to 451,000 won and Posco Future M adding 11.13 percent to 26,000 won.

Carmakers were also winners, with Hyundai Motors rising 1 percent to 172,000 won and Kia increasing 1.4 percent to 78,500 won. Hyundai Mobis added 2.82 percent to 218,500 won.

Posco Holdings rose 6.21 percent to 25,000 won.

Asiana Airlines, on the other hand, plunged 8.68 percent to 10,210 won after the company decided to sell its cargo business, as Korean Air seeks to win antitrust approval from European Union regulators for its takeover of the smaller rival.

The local currency ended at 1,342.90 won against the dollar, down 14.4 won from the previous session's close.

Bond prices, which move inversely to yields, closed higher. The yield on three-year government bonds fell 9.6 points to 3.98 percent, and the return on the benchmark U.S. 10-year government bond dropped 20 points to 4.7 percent.

BY KIM JU-YEON, YONHAP [kim.juyeon2@joongang.co.kr]