Key points:

• KOSPI rises as foreigners become net buyers
• Korean won strengthens against the dollar
• South Korea’s benchmark bond yield falls

South Korean shares saw a strong rise of more than 1% on Thursday, following a rally on Wall Street. This uptick came after inflation data and the Federal Reserve’s policy decision were released.

Chipmakers drive KOSPI surge as U.S. markets hit record highs

The benchmark KOSPI index increased by 42.76 points, or 1.55%, reaching 2,770.93 by 0054 GMT. This gain was primarily driven by the chipmakers. In the United States, the S&P 500 and Nasdaq achieved record closing highs for the third consecutive session on Wednesday, as inflation data turned out to be softer than anticipated.

Also read: Why South Korea’s Stock Market is Pumping

The Federal Reserve decided to keep interest rates steady and suggested that the beginning of rate cuts might be delayed until December. Policymakers indicated that the economic outlook remains largely unchanged in its major aspects for the foreseeable future.

Korean tech and chip stocks rally

South Korea’s finance ministry and central bank officials stated on Thursday that they will work closely to handle any potential financial market volatility amid differing global monetary policies.

Chipmaker Samsung Electronics saw its shares rise by 2.22%, while peer SK Hynix experienced a 4.42% gain. This was supported by the 2.9% jump in the Philadelphia Semiconductor Index overnight.

Other tech companies like search engine Naver and instant messenger Kakao also saw their shares climb by 2.26% and 2.09%, respectively. Battery makers, automakers, and biopharmaceutical manufacturers also showed firm performance.

Out of the 928 traded issues, 587 shares advanced while 265 declined, indicating a broadly positive market sentiment. Foreign investors were net buyers of shares worth 434.0 billion won ($317.46 million) on the main board.

Korean Won strengthens, Treasury bond futures rise

Picture: Korean won on the rise, trading at 1370.90, as seen on the VT Markets app.

The Korean won was quoted at 1,369.4 per dollar on the onshore settlement platform, which is 0.50% higher than its previous close at 1,376.2. In the money and debt markets, June futures on three-year treasury bonds increased by 0.12 points to 104.85.

The most liquid three-year Korean treasury bond yield fell by 6.6 basis points to 3.262%, while the benchmark 10-year yield decreased by 4.0 basis points to 3.330%.

This combination of strong equity performance, a stronger currency, and falling bond yields suggests a cautiously optimistic outlook for South Korean financial markets. However, traders should remain vigilant for any new developments that could affect market stability.

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