Kospi shoots up after strong Samsung earnings

Shares surged on tech gains and rate-cut expectations. Samsung's strong earnings buoyed the market.

A screen in Hana Bank's trading room in central Seoul shows the Kospi closing at 2,770.69 points on Wednesday, up 1.19 percent, or 32.50 points, from the previous trading session. [YONHAP]

Shares ended sharply higher on Wednesday on tech gains and expectations that the U.S. Federal Reserve could begin a rate-cut cycle within months. The won rose in value against the dollar.

The Kospi shot up 32.50 points, or 1.19 percent, to close at 2,770.69.

Trade volume was moderate at 543.14 million shares worth 11.84 trillion won ($8.6 billion), with gainers outnumbering losers 586 to 302.

Institutions and foreigners bought a combined 202 billion won worth of stocks, offsetting individuals' stock selling valued at 180 billion won.

Overnight, U.S. stocks closed mixed. The Dow Jones Industrial Average rose 0.5 percent to 40,743.33 points, but the tech-heavy Nasdaq fell 1.3 percent to 17,147.42.

“Samsung Electronics' robust earnings results and gains in global tech stocks gave a boost to the local stock market,” said Lee Kyung-min, an analyst with Daishin Securities.

Earlier in the day, the Korean chip giant reported an operating profit of 10.44 trillion won for the April-June quarter, a sharp increase from the 668.5 billion won reported a year earlier boosted by higher chip demand.

The focus now turns to the Fed's policy decision on Wednesday (U.S. time) and earnings results of Big Tech firms, such as Apple and Amazon this week, analysts said.

With signs of cooling inflation, the U.S. central bank is widely expected to cut rates as early as September.

In Seoul, tech stocks led gains.

Samsung Electronics jumped 3.6 percent to 83,900 won, chipmaker SK hynix climbed 3 percent to 194,600 won, and Korea Gas Corp. gained 5 percent to reach 44,500 won.

Among decliners, carmaker Hyundai Motor fell 0.4 percent to 249,000 won, steelmaker Posco Holdings declined 2.2 percent to 351,500 won and battery maker LG Energy Solution went down 2.7 percent to 324,000 won.

The local currency was trading at 1,376.5 won against the dollar as of 3:30 p.m., down 8.8 won from the previous session.

Bond prices, which move inversely to yields, closed mixed. The yield on three-year government bonds rose 1.2 basis points to 3.006 percent, and the return on the benchmark U.S. 10-year bonds fell 4.0 basis points to 4.135 percent.

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