Kospi gains more than 1% amid boost from chips and batteries

Shares rose more than 1 percent Wednesday backed by gains in chip and battery shares amid hopes for a rate cut by the U.S. Federal Reserve. The local currency rose in value against the dollar.

A screen in Hana Bank's trading room in central Seoul shows the Kospi closing at 2,689.50 points on Wednesday, up 1.03 percent, or 27.40 points, from the previous trading session. [NEWS1]

Shares rose more than 1 percent Wednesday backed by gains in chip and battery shares amid hopes for a rate cut by the U.S. Federal Reserve. The local currency rose in value against the dollar.

The Kospi rose 27.40 points, or 1.03 percent, to close at 2,689.50.

Trade volume was heavy at 871 million shares worth 13.4 trillion won ($9.76 billion), with gainers far outpacing losers 642 to 226.

Foreign investors bought shares worth a net 589 billion won, while institutions and individuals dumped 586 billion won in shares.

Overnight, the U.S. stock market closed higher on softer-than-expected labor market data that bolstered hopes for an interest-rate cut by the Fed. Artificial intelligence-related big tech stocks, such as Nvidia, also drove up Wall Street shares.

The Dow Jones Industrial Average added 0.36 percent, while the Nasdaq composite edged up 0.17 percent, and the S&P 500 gained 0.15 percent.

Kim Seok-hwan, an analyst at Mirae Asset Securities, said anticipations for a potential collaboration between Samsung Electronics and Nvidia "will serve in favor of the stock market" despite heightened economic uncertainties.

In Seoul, Samsung Electronics jumped 2.79 percent to 77,400 won following news that U.S. tech giant Nvidia was considering using the Korean chipmaker's high bandwidth memory chips in its products. SK hynix also added 0.21 percent to 193,700 won.

Battery shares also continued gains from the previous session. LG Energy Solution surged 4.46 percent to 351,500 won, and Samsung SDI also jumped 3.57 percent to 391,500 won.

Refiners, meanwhile, retreated, following the gains made after the government announced a plan to carry out an oil and gas exploration project in the East Sea. SK Innovation slumped 0.67 percent to end at 103,600 won.

The local currency finished at 1,373 won against the U.S. dollar, down 3 won from the previous session's close.

Bond prices, which move inversely to yields, closed higher. The yield on three-year government bonds fell 4.5 basis points to 3.345 percent, and the return on the benchmark U.S. 10-year government bonds dropped 6.4 basis points to 4.328 percent.

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