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Seoul shares up for 2nd day amid growing Fed rate pause outlook

Sept. 4, 2023 - 16:09 By Yonhap
An electronic board showing the Korea Composite Stock Price Index at a dealing room of the Hana Bank headquarters in Seoul on Monday. (Yonhap)

South Korean stocks closed higher for the second consecutive session Monday on growing optimism the US Federal Reserve will pause the interest rate hike in the next month's policy meeting after key unemployment data showed a cooling economy. The local currency fell against the US dollar.

The benchmark Korea Composite Stock Price Index (Kospi) advanced 20.84 points, or 0.81 percent, to finish at 2,584.55. Trading volume was moderate at 337.3 million shares worth 8.57 trillion won ($6.49 billion), with decliners outpacing gainers 432 to 431.

"Jobs data offset worries about additional tightening by the Fed," said Han Ji-young, an analyst at Kiwoom Securities Co.

"The latest batch of moderate employment data shows that the imbalance in the labor market is easing and that there has been less inflationary pressure on wages," Han said.

The US unemployment rate jumped to 3.8 percent in August, the Labor Department said Friday, and wage growth slowed. The August nonfarm payrolls were 187,000, increasing from last month and more than the market had expected.

The fresh readings came as a reminder the Fed's aggressive tightening policy is working, raising the likelihood the central bank will pause its interest rate hikes in its September policy meeting.

Most major stocks gathered ground across the board, with tech and chemical blue chips driving up the Kospi.

Market behemoth Samsung Electronics rose 0.28 percent to 71,200 won, extending its rally for the second straight trading session. Top battery maker LG Energy Solution climbed 1.53 percent to 530,000 won.

Steelmaker POSCO Holdings jumped 5.36 percent to 590,000 won, and leading energy company SK Innovation advanced 1.99 percent to 179,500 won.

No. 1 automaker Hyundai Motor was among the decliners, edging down 0.05 percent to 187,300 won. Internet portal provider Naver fell 1.4 percent to 211,500 won.

The Korean won ended at 1,319.80 won against the US dollar, down 1.0 won from Friday's close. (Yonhap)