Stocks close up as investors remain cautious

Shares closed slightly higher Tuesday as investors remained cautious after a recent rally stemming from the U.S. central bank's dovish stance. The local currency rose in value against the dollar.

Screens in Hana Bank's trading room in central Seoul show the Kospi closing at 2,602.59 points on Tuesday, up 0.12 percent, or 3.08 points, from the previous trading session. [NEWS1]

Shares closed slightly higher Tuesday as investors remained cautious after a recent rally stemming from the U.S. central bank's dovish stance. The local currency rose in value against the dollar.

After choppy trading, the Kospi gained 3.08 points, or 0.12 percent, to close at 2,602.59, ending the two-day losing streak.

Trade volume was moderate at 429.4 million shares worth 9.4 trillion won ($7.26 billion), but decliners outnumbered gainers 491 to 378.

"The U.S. Federal Reserve's hints at a possible rate cut next year have pushed the Korean index up further over the past few days, and it seemingly reached a point that investors think is too high," Jung In-ji, an analyst from Yuanta Securities Korea, said.

"Investors are concerned about some mixed economic outlooks for next year," Jung added.

Tech, financial and pharmaceutical shares finished in mixed territory, while battery and steelmakers went south.

Samsung Electronics rose 0.92 percent to 76,600 won, and SK hynix climbed 0.21 percent to 140,900 won.

Banking group Shinhan Financial Group gained 0.77 percent to 39,100 won, and non-life insurer Samsung Fire & Marine Insurance added 0.98 percent to 258,000 won.

Bio firms were also in positive territory, with Celltrion increasing 1.78 percent to 188,800 won and Samsung Biologics rising 0.28 percent to 722,000 won.

Battery makers were among the biggest losers, with industry leader LG Energy Solution falling 0.95 percent to 415,500 won and Posco Future M sinking 1.97 percent to 348,000 won.

Steelmaker Posco Holdings dropped 1.46 percent to 473,500 won, and zinc smelter Korea Zinc declined 0.2 percent to 500,000 won.

Defense firms also finished lower as Hanwha Aerospace tumbled 3.68 percent to 122,900 won and LIG Nex1 sank 3.76 percent to 130,600 won.

Container shipper HMM dropped 4.06 percent to 19,380 won.

The local currency closed at 1,294.5 won against the dollar, down 8.5 won from the previous session's close.

Bond prices, which move inversely to yields, closed mixed. The yield on three-year government bonds fell 1.9 points to 3.216 percent, and the return on the benchmark U.S. 10-year government bonds rose 1.0 points to 3.895 percent.

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