Stocks end two-day slide as government vows to boost the market

Stocks rebounded as foreign investors bolstered the market with an extended buying spree. The local currency fell slightly against the dollar. Tech and auto stocks led gains.

Screens in Hana Bank's trading room in central Seoul show the Kospi closing at 2609.58 points on Wednesday, up 1.30 percent, or 33.38 points, from the previous trading session. [NEWS1]

Shares closed higher Wednesday, ending a two-day losing streak amid an extended buying spree from foreign investors. The local currency fell slightly against the dollar.

The Kospi gained 33.38 points, or 1.30 percent, to close at 2,609.58.

Trade volume was heavy at 508.3 million shares worth 11.3 trillion won ($8.5 billion), with gainers outnumbering losers 642 to 239.

Foreign investors extended their buying streak to a sixth consecutive session, scooping up 536.2 billion won worth of local shares. Institutions purchased a net 625.7 billion won, ending their two-day selling streak, while individuals offloaded 1.13 trillion won worth of shares.

Most large caps finished in positive terrain with tech, battery and auto stocks leading the advance.

Samsung Electronics added 0.81 percent to close at 75,000 won, while SK hynix remained flat at 138,000 won.

LG Energy Solution surged 2.39 percent to 386,000 won with Samsung SDI gaining 2.14 percent to 382,000 won.

Hyundai Motor spiked 4.03 percent to 245,000 won with Kia advancing 2.78 percent to 114,700 won.

The stock market reflected investors’ interest toward shares with a low price-to-book Ratio (PBR) as the government hinted at the introduction of a corporate value-up program aiming to boost the prices of undervalued stocks.

“With the investment flowing from foreigners and institutions, the Kospi ascended more than a percent,” said Lee Kyung-min, a researcher from Daishin Securities. “Shares with low PBR are gaining traction, and investors are showing interest in secondary batteries.”

Sectors with low PBR, mainly transportation, insurance and finance showed gains. The retail and steel industries also closed in positive terrain. Pharmaceutical and service shares fell.

The local currency closed at 1,327.80 won against the U.S. dollar, up 0.20 won from the previous session's close.

The Kosdaq gained 4.89 points to close at 811.92.

Retail investors bought a net 293.2 billion won, while institution and foreign investors offloaded a net 235.5 billion and 16.5 billion won, respectively.

Bond prices, which move inversely to yields, closed higher. The yield on three-year government bonds fell 0.4 basis points to 3.286 percent, and the return on the benchmark U.S. 10-year government bonds fell 5.9 basis points to 4.101 percent.

BY LEE SOO-JUNG, YONHAP [lee.soojung1@joongang.co.kr]