Institutional buying, Fed rate cut pushes Kospi higher

Shares ended higher Friday on institutional buying after the Federal Reserve's first rate cut in more than four years lifted investor sentiment. The won fell against the U.S. dollar.

A screen in Hana Bank's trading room in central Seoul shows the Kospi closing at 2,593.37 points on Friday. [YONHAP]

Shares ended higher Friday on institutional buying after the Federal Reserve's first rate cut in more than four years lifted investor sentiment. The won fell against the U.S. dollar.

The benchmark Kospi rose 0.49 percent, or 12.57 points, to close at 2,593.37. The main index rose 0.7 percent this week.

Trading volume was moderate at 477.43 million shares worth 13.78 trillion won ($10.4 billion), with gainers exceeding decliners 562 to 319.

Overnight, the Dow Jones Industrial Average added 1.3 percent to 42,025.19 points, and the tech-heavy Nasdaq Composite jumped 2.5 percent to 18,013.98.

The Fed kicked off its monetary-easing cycle by cutting its overnight lending rate by half a percentage point to a range of 4.75 percent to 5 percent on Wednesday.

The U.S. central bank also pledged further rate cuts.

"Tech shares, such as Samsung Electronics and SK hynix, rebounded on bargain hunting amid eased concerns over an economic recession and an increased appetite for risky assets," said Lee Jae-won, an analyst at Shinhan Securities.

Institutions bought a net 273 billion won worth of stocks, offsetting foreigners and individuals' stock selling valued at 278 billion won.

In Seoul, large-cap stocks were mixed.

SK hynix rose 2.8 percent to 157,100 won while LG Electronics climbed 0.6 percent to 110,100 won. Hyundai Motor advanced 1.8 percent to 250,500 won and LG Energy Solution gained 0.5 percent to 393,500 won.

On Thursday, Morgan Stanley downgraded SK hynix to underweight from overweight, citing its fading pricing power. SK hynix plunged more than 6 percent on the report. Samsung Electronics also ended down 2 percent.

Among decliners, Samsung Electronics fell 0.2 percent to 63,000 won; Korea Aerospace Industries shed 1.9 percent to 52,600 won; and Amorepacific was down 2.1 percent to 137,700 won.

The local currency traded at 1,329.10 won against the dollar at 3:30 p.m., up 0.1 won from the previous session. The Kosdaq gained 8.82 points, or 1.19 percent, to close at 748.33.

BY CHO YONG-JUN, YONHAP [cho.yongjun1@joongang.co.kr]