S. Korean stocks end higher on Fed's record rate cut

SEOUL, Dec. 17 (Yonhap) -- South Korean stocks ended higher Wednesday as investors scooped up financial shares following the U.S. Federal Reserve's historic interest rate cut, analysts said. The local currency rose against the U.S. dollar.
Paring steep gains in early session trading, the benchmark Korea Composite Stock
Price Index (KOSPI) added 8.19 points, or 0.71 percent, to close at 1,169.75.
Volume was heavy at 638.44 million shares worth 6.48 trillion won (US$4.89
billion), with gainers outpacing losers 444 to 410.
"The U.S. rate cut is helping to relieve investors' risk-averse sentiment and is
inducing exposure to emerging markets," said Kim Seung-han, an analyst at HI
Investment & Securities.
The U.S. Federal Reserve Tuesday reduced its benchmark federal funds rate to a
target of zero to 0.25 percent from 1 percent, the lowest on record, and pledged
to use all tools available to lift the sagging economy.
The Fed's historic decision instantly boosted Wall Street, with the Dow Jones
industrial average surging 4.2 percent and the tech-dominated Nasdaq jumping 5.41
percent.
Financial shares led the market advance, tracking overnight Wall Street gains in
the financial sector.
Hana Financial Group, the parent company of Hana Bank, advanced 6.57 percent to
21,900 won and KB Financial Group surged 6.15 percent to 36,250 won. Samsung Fire
& Marine Insurance jumped 3.78 percent to end at 178,500 won.
Steel makers followed suit with POSCO, the country's biggest mill, soaring 2.2
percent to 391,500 won and Hyundai Steel adding 0.62 percent to 40,700 won.
Auto makers, however, suffered losses after two days of steep gains. Hyundai
Motor shed 1.05 percent to 47,000 won and its affiliate Kia Motors lost 1.22
percent to 8,090 won.
IT exporters finished mixed. Market leader Samsung Electronics gained 0.55
percent to 459,500 won while LG Electronics trimmed 0.73 percent to 81,500 won.
Hynix Semiconductor, the world's second biggest memory chipmaker, gained 3.58
percent following a news report the U.S. Justice Department cleared it of charges
that it violated anti-trust rules. It finished at 7,230 won.
The local currency closed at 1,324.7 won to the dollar, up 24.9 won from
Tuesday's close, extending its gains for a third day. The U.S. Fed's radical rate
reduction also helped to boost foreign investors' won holdings, dealers said.
pbr@yna.co.kr
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