Stocks even out as tech and auto save the day

Stocks ended almost flat Thursday amid gains in the tech and auto industries, despite higher-than-expected U.S. inflation dimming the hopes of early rate cuts from the Federal Reserve.

A screen in Hana Bank's trading room in central Seoul shows the Kospi closing at 2,706.96 points on Thursday, up 0.07 percent, or 1.80 points, from the previous trading session. [YONHAP]

Stocks ended almost flat Thursday amid gains in the tech and auto industries, despite higher-than-expected U.S. inflation dimming the hopes of early rate cuts from the Federal Reserve. The won fell sharply to the lowest point in 17 months against the dollar.

After starting 1.45 percent lower, the Kospi pared earlier losses by rising 1.8 points, or 0.07 percent, to close at 2,706.96.

Trade volume was moderate, at 522.4 million shares worth 12.5 trillion won ($9.16 billion), with decliners outpacing gainers 606 to 270.

Retail and foreign investors bought local shares worth 43.8 billion won and 1.02 trillion won, respectively, offsetting institutional stock sales valued at 1.08 trillion won.

Wall Street lost ground overnight after the release of the U.S. consumer price index (CPI) report dashed investors' bets that the Federal Reserve would start cutting its rates soon.

The CPI report for March, which excludes food and energy costs, increased 0.4 percent from February, more than the expected 0.3 percent rise, showing that inflation is still elevated.

After the release of the CPI report, many economists' expectations cooled around the Fed cutting its rates in June.

Also, political uncertainty has eased to some degree after the general elections, as the country's opposition bloc captured nearly 200 of the 300 seats in the National Assembly.

"The Kospi started on a negative note due to impact from the overnight U.S. market, but semiconductor shares saved the day," Kim Seok-hwan, an analyst at Mirae Asset Securities, said.

Foreigners seem to have expectations about the chip industry's performance due to the Korean government's investment plan for the industry and the positive quarterly revenue from Taiwanese chip giant TSMC, Kim added.

In Seoul, chipmakers and automakers gained ground.

Samsung Electronics rose 0.6 percent to 84,100 won, and SK hynix jumped 3.01 percent to 188,400 won.

Hanmi Semiconductor surged 6.62 percent to 141,700 won on the news it has secured a deal to supply chip-making equipment to Micron Technology.

Hyundai Motor shot up 5.7 percent to 241,000 won, and Kia advanced 3.43 percent to 111,700 won.

Hyundai Mobis climbed 3.29 percent to 251,000 won.

Battery shares were mixed. LG Energy Solution moved up 1.6 percent to 380,000 won and Posco Future M 0.89 percent to 282,500 won. But Samsung SDI dropped 0.85 percent to 407,500 won.

IT and financial shares went south.

Naver sank 2.86 percent to 183,600 won, and Kakao slid 2.44 percent to 48,050 won.

KB Financial Group and Shinhan Financial Group both lost more than 1.1 percent to close at 68,300 won and 43,100 won, respectively. Samsung Life Insurance plunged 5.03 percent to 85,000 won.

The local currency ended at 1,364.10 won against the greenback, up 9.20 won from the previous session's close. This marks the lowest since Nov. 10, when the won closed at 1,378.5 to the greenback.

The Kosdaq fell 1.23 points, or 0.14 percent, to close at 858.10.

Bond prices, which move inversely to yields, closed lower. The yield on three-year government bonds rose 7.6 basis points to 3.466 percent, and the return on 10-year government bonds climbed 18.2 basis points to 4.547 percent.

BY KIM JI-YE, YONHAP [kim.jiye@joongang.co.kr]