Kospi closes up as economic data sparks optimism for a U.S. rate cut

The Kospi rose 46 points, or 1.74 percent, to close at 2,682.52, ending in positive territory for the second consecutive session after U.S. data showed that inflation a rose as expected.

A screen in Hana Bank's trading room in central Seoul shows the Kospi closing at 2,682.52 points on Monday, up 1.74 percent, or 46.00 points, from the previous trading session. [NEWS1]

Shares rallied by more than 1.7 percent on Monday as investor sentiment was boosted by favorable economic data that could lead to a rate cut in the United States. The won rose sharply in value against the dollar.

The Kospi rose 46 points, or 1.74 percent, to close at 2,682.52, ending in positive territory for the second consecutive session.

Trade volume was heavy at 768.6 million shares worth 13.8 trillion won ($10 billion), with gainers far outpacing losers 632 to 249. Foreigners and institutions led the sharp gains, purchasing a net 182.1 billion won and 233 billion won, respectively, while individuals dumped a net 418.7 billion won.

The rally came with fresh data over the weekend. The U.S. Personal Consumption Expenditures Price Index, a key inflation indicator, rose about as expected in April, while Korea's exports rose for eight straight months in May led by strong overseas sales of semiconductors.

Most shares finished higher across the board.

Chipmakers finished up, with Samsung Electronics jumping 2.99 percent to 75,700 won and SK hynix adding 2.64 percent to close at 194,200 won.

Carmakers also performed strongly as Hyundai Motor vaulted 4.74 percent to 265,000 won and Kia advanced 2.55 percent to 120,700 won.

Oil refinery SK Innovation soared 6.3 percent to 106,300 won and Samsung Heavy Industries jumped 4.8 percent to 9,600 won after Seoul's announcement of a potentially massive oil and gas reserve off the country's east coast.

SK, SK Group's holding company, added 1.48 percent to 178,800 won, extending its winning streak after a court ruling on the divorce suit between SK Chairman Chey Tae-won and his estranged wife, Roh Soh-yeong, last Thursday.

Hybe climbed 0.25 percent to 200,500 won ahead of BTS member Jin's completion of military duty next week.

The won ended at 1,376.1 won against the dollar, down 8.4 won from the previous session's close.

Bond prices, which move inversely to yields, closed higher. The yield on three-year government bonds fell 1.6 basis points to 3.435 percent, and the return on the benchmark U.S. 10-year government bonds dropped 5.4 basis points to 4.498 percent.

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