Shares edge up with Fed rate cuts likely in 2024

Shares closed slightly higher Monday amid expectations that the U.S. Federal Reserve will start its rate-cutting cycle in 2024. The local currency fell in value against the dollar.

Screens in Hana Bank's trading room in central Seoul show the Kospi closing at 2,566.86 points on Monday, up 0.13 percent, or 3.30 points, from the previous trading session. [NEWS1]

Shares closed slightly higher Monday amid expectations that the U.S. Federal Reserve will start its rate-cutting cycle in 2024. The local currency fell in value against the dollar.

The Kospi gained 3.3 points, or 0.13 percent, to close at 2,566.86.

Trade volume was light at 377.2 million shares worth 10.02 trillion won ($7.73 billion), with winners outpacing losers 453 to 427.

Last week, the Fed kept its rate unchanged and hinted at possible cuts for 2024.

"As the U.S. Federal Open Market Committee this month hinted toward the end of the latest interest rate hike cycle to raise anticipations for rate cuts next year, we may see an earlier-than-expected upward trajectory on the KOSPI," said Lee Kyung-min, an analyst at Daeshin Securities.

Lee added that the Kospi is likely to continue its upward momentum until the early part of the first quarter of 2024.

Battery-related shares led the overall gains, with Posco Future M adding 1.39 percent to end at 365,500 won and Ecopro Materials surging 26.04 percent to 213,000 won.

Container shipper HMM soared 14.12 percent to 17,450 won over expectations that its creditors may soon announce a preferred bidder to take over the company under a debt restructuring scheme.

Steelmakers also finished higher, with Posco Holdings rising 1.98 percent to 489,500 won while chemical firms also enjoyed gains, with LG Chem adding 1.01 percent to finish at 498,000 won.

Celltrion gained 4.17 percent to 177,200 won.

Ecopro Materials soared 26.04 percent to finish at 44,000 won.

Samsung Electronics, however, slid 0.55 percent to 72,900 won along with other tech shares. Automaker Hyundai Motor and refiner SK Innovation shed 0.41 percent and 0.79 percent to finish at 192,000 won and 137,000 won, respectively.

The local currency closed at 1,297.20 won against the dollar, up 0.70 won from the previous session's close.

Bond prices, which move inversely to yields, closed higher. The yield on three-year government bonds fell 0.9 points to 3.275 percent, and the return on the benchmark U.S. 10-year government bonds fell 0.8 points to 3.912 percent.

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