Kospi rises for fourth consecutive session as U.S. producer prices ease concerns

Korean shares closed higher for the fourth consecutive session on Wednesday, as less-than-expected increases in U.S. producer prices alleviated concerns and boosted investor sentiment. The local currency also rose sharply against the dollar.

A screen in Hana Bank's trading room in central Seoul shows the Kospi closing at 2,644.50 points on Wednesday, up 0.88 percent, or 23.00 points, from the previous trading session. The Kosdaq rose 1.56 percent, or 11.97 points, to 776.83. [YONHAP]

Korean shares closed higher for the fourth consecutive session on Wednesday, as less-than-expected increases in U.S. producer prices alleviated concerns and boosted investor sentiment. The local currency also rose sharply against the dollar.

The benchmark Kospi gained 23 points, or 0.88 percent, to close at 2,644.50.

Trade volume was somewhat light at 321.4 million shares worth 8.6 trillion won ($6.3 billion), with winners outnumbering losers 649 to 234.

Foreign investors purchased 389.9 billion won worth of local shares, offsetting a combined 430.1 billion won sell-off by retail investors and institutions.

Overnight, major U.S. indexes made significant gains, led by the strong performance of the "Magnificent Seven," as softer U.S. Producer Price Index (PPI) data fueled bets that the Federal Reserve may start cutting rates soon.

The latest PPI also eased concerns that the world's largest economy may not achieve a soft landing, though investors are now awaiting the consumer price index and retail sales data due later this week.

"The Kospi rose as foreign investors bought local shares on improved investors' sentiment following the July PPI," said Lee Kyoung-min, an analyst at Daishin Securities.

Samsung Electronics advanced 1.45 percent to 77,200 won, while SK hynix jumped 2.64 percent to 186,700 won, tracking AI chip giant Nvidia's rally overnight.

Battery maker LG Energy Solution soared 2.64 percent to 337,000 won, reflecting Tesla's gains.

Samsung SDI and Posco Future M also increased by 2.54 percent and 2.44 percent to 323,500 won and 210,000 won, respectively.

Posco Holdings surged 2.47 percent to 332,500 won, and chemical producer LG Chem climbed 2.6 percent to 296,000 won.

However, auto shares lost ground, with Hyundai Motor down 0.82 percent to 241,000 won and its smaller affiliate Kia down 0.49 percent to 102,300 won.

Samsung Life Insurance plunged 6.17 percent to 88,200 won, and K-pop entertainment agency JYP fell 7.88 percent to 50,300 won after posting poor earnings results.

The local currency was trading at 1,360.6 won against the dollar as of 3:30 p.m., down 9.8 won from the previous session's close.

Bond prices, which move inversely to yields, closed higher. The yield on three-year government bonds fell 3.1 basis points to 2.888 percent and the return on the benchmark U.S. 10-year bonds dropped 6.3 basis points to 3.842 percent.

BY YOON SEUNG-JIN, YONHAP [yoon.seungjin@joongang.co.kr]