Kospi snaps losing streak with expectations of a U.S. rate cut

The benchmark Kospi rose 2.3 percent, or 58.72 points, to close at 2,572.09 as tech and auto shares climbed with expectations that the U.S. Federal Reserve will cut the key rate.

A screen in Hana Bank's trading room in central Seoul shows the Kospi closing at 2,572.09 points on Thursday, up 58.72 points, or 2.30 percent, from the previous trading session.[NEWS1]

Shares closed higher on Thursday to snap a seven-day losing streak, led by tech gains, with investors expecting a rate cut by the U.S. Federal Reserve next week after the release of U.S. inflation data. The won traded higher against the dollar.

The benchmark Kospi rose 2.3 percent, or 58.72 points, to close at 2,572.09.

Trading volume was moderate at 334.63 million shares worth 11.04 trillion won ($8.2 billion), with decliners far exceeding gainers 762 to 127.

Institutions and foreigners bought a combined 294 billion won worth of stocks, exceeding individuals' stock selling valued at 232.86 billion won.

The U.S. core consumer price index, excluding volatile food and energy costs, for August rose 0.3 percent from a month earlier.

The inflation data dashed hopes for a big cut by the U.S. central bank, but market participants expect there is likely to be at least a 25-basis-point cut, analysts said.

In Seoul, tech and auto stocks led gains.

Samsung Electronics rose 2.2 percent to 66,300 won, chipmaker SK hynix jumped 7.4 percent to 168,800 won, carmaker Hyundai Motor gained 3.8 percent to 232,000 won and battery maker LG Energy Solution was up 3.8 percent to 414,000 won.

Financial shares also closed higher. KB Financial Group rose 0.26 percent to 78,100 won. Shinhan Financial Group jumped 1.51 percent to 53,900 won, and Woori Financial Group also gained 1.61 percent to 15,160 won.

Among decliners, tobacco company KT&G fell 0.2 percent to 110,000 won, battery maker Samsung SDI declined 0.6 percent to 364,000 won, and HYBE, the powerhouse behind the global K-pop sensation BTS, shed 2.8 percent to 169,000 won.

The local currency traded at 1,338.7 won against the dollar at 3:30 p.m., down 0.3 won from the previous session.

Bond prices, which move inversely to yields, closed lower. The yield on three-year government bonds gained 4.3 basis points to reach 2.865 percent, and the return on the benchmark U.S. 10-year government bond rose 0.8 basis points to 3.654 percent.

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