South Korean equities surge for a second consecutive day as forecasts point to a pause in the Federal Reserve’s rate hikes

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(ATTN: ADDS bond yields at bottom)

SEOUL, Sept. 4 (Yonhap) — South Korean stocks finished on a positive note on Monday, the second day in a row, as investors anticipated a potential halt in the U.S. Federal Reserve’s interest rate hikes in light of data that suggested a slowing economy. The local currency, however, depreciated against the U.S. dollar.

The Korea Composite Stock Price Index (KOSPI) rose 20.84 points, or 0.81 percent, to end at 2,584.55. Trading volume was moderate at 337.3 million shares worth 8.57 trillion won (US$6.49 billion), with declining stocks just barely surpassing those that gained in value.

“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 U.S. unemployment rate increased to 3.8 percent in August, the Labor Department said Friday (local time), and wage growth slowed. The August nonfarm payrolls were 187,000, higher than the previous 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 U.S. dollar, down 1.0 won from Friday’s close.

Bond prices, which move inversely to yields, closed lower. The yield on three-year Treasurys gained 4.9 basis points to 3.738 percent and the return on the benchmark five-year government bonds added 6.1 basis points to 3.778 percent.

elly@yna.co.kr
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