SEOUL: South Korean stocks ended marginally higher on Monday as institutional investors bought beaten-down shares to support the market amid a continued foreign sell-off. The South Korean won lost ground against the greenback on renewed expectations of a U.S. rate hike in September.
The benchmark Korea Composite Stock Price Index (KOSPI) inched up 0.2 percent, or 3.82 points, to 1,941,29. Trading volume was slim at 345 million shares worth 5.93 trillion won (US$5.01 billion), with losers outnumbering gainers 446 to 371.
The index got off to a weak start but pared earlier losses in the last minutes as institutions loaded up on blue chip stocks. Foreigners remained net sellers for the 18th consecutive session, while retail investors sold more shares than they bought.
“Foreigners remained cautious over Korean stocks as uncertainties over the U.S. interest rate hike remain and Chinese stock markets continue to fluctuate in response to the government policy,” said Bae Sung-young, an analyst at Hyundai Securities.
“Their selling mode is expected to last for a while before the Federal Reserve makes a decision on the highly anticipated issue.”
Auto shares led the gains as the cheaper local currency against the greenback raised hopes for improved earnings.
Industry leader Hyundai Motor advanced 3.47 percent to 149,000 won, and its sister company Kia Motor gained 2.31 percent to 48,700 won. Hyundai Mobis, an auto parts maker, rose 2.48 percent to 206,500 won.
Securities were bearish after top Federal Reserve officials left the door open for an impending interest rate hike during a meeting in Jackson Hole, Wyoming, over the weekend.
Vice Chairman Stanley Fischer said there is “good reason” to believe inflation will accelerate, fueling speculation that the central bank could raise rates as soon as September despite prospects of further volatility in China’s equity market.
