South Korean stocks rose by more than 2 percent Wednesday as foreign investors scooped up shares on continued hopes for a rate cut in the United States and the stabilized foreign exchange market.
The Korean won fell sharply against the US dollar following Finance Minister Koo Yun-cheol's pledge to take "decisive action" against excessive volatility in the won-dollar rate.
The remark followed the National Pension Service's participation in a consultative body that oversees the FX market, which has experienced wide volatility in recent weeks, along with the government and the central bank.
The benchmark Korea Composite Stock Price Index added 103.09 points, or 2.67 percent, to close at 3,960.87, marking the highest daily close since last Thursday, when it finished at 4,004.85.
Trade volume was light at 291.5 million shares worth 15.6 trillion won ($10.6 billion), with winners sharply beating losers 771 to 125.
Foreign and institutional investors purchased a net 516.3 billion won and 1.2 trillion won, respectively, while individuals sold a net 1.8 trillion won.
Overnight, US stocks rallied as recent economic data supported views that the Federal Reserve will lower the key rates at its monetary policy meeting next month.
The Dow Jones Industrial Average rose 1.43 percent, and the Nasdaq composite gained 0.67 percent.
"Foreigners returned to net buyers as the Korean won stabilized after dropping to some 1,470 won level," said Lee Jae-won, an analyst at Shinhan Securities. "As the NPS joined the FX market consultative body, it is expected to increase local stocks in its portfolio."
Most shares ended in positive territory.
Market bellwether Samsung Electronics jumped 3.52 percent to 102,800 won and its chipmaking rival SK hynix added 0.96 percent to 524,000 won on eased artificial intelligence fears.
No. 1 internet company Naver vaulted 4.15 percent to 263,500 won ahead of a board meeting to approve its planned acquisition of Dunamu Inc., the operator of South Korea's largest cryptocurrency exchange, Upbit.
Chemical shares were bullish after the industry minister's strong comment on restructuring. LG Chem soared 9.37 percent to 397,000 won, and Lotte Chemical climbed 1.48 percent to 75,600 won.
Leading biotech firm Samsung Biologics advanced 1.48 percent to 1.65 million won, and major banking group KB Financial Group mounted 2.47 percent to 124,700 won.
The local currency was quoted at 1,465.6 won against the greenback at 3:30 p.m., up 6.8 won from the previous session. (Yonhap)
