SEOUL, September 17 (AJP) - South Korean stocks extended gains Thursday morning despite the U.S. Federal Reserve's first interest rate hike in more than three years, as easing oil prices and strength in defense and shipbuilding shares offset continued foreign selling.
As of 10:30 a.m., the benchmark KOSPI stood at 6,756.11, up 0.6 percent. The index had climbed as high as 6,795.53 after opening sharply higher, before giving back part of the advance. It touched a session low of 6,710.58.
Foreign investors remained firmly on the sell side, unloading 565.5 billion won ($410 million) of KOSPI shares. Institutions sold 59.6 billion won, while retail investors bought a 216.4 billion won.
The continued foreign selling limited the market's upside after overseas investors had already sold Korean stocks for six consecutive sessions through Wednesday.
The gains came after the Fed raised its benchmark interest rate by 25 basis points to a range of 3.75 percent to 4.00 percent overnight, its first tightening move since July 2023.
Fed Chair Kevin Warsh struck a hawkish tone, saying inflation remained too high and had persisted for too long. U.S. Treasury yields remained elevated, with the benchmark 10-year yield around 5.02 percent.
Wall Street finished lower following the decision. The Dow Jones Industrial Average fell 1.21 percent, while the S&P 500 lost 0.45 percent and the Nasdaq Composite edged down 0.01 percent.
Technology stocks held up better than the broader market. Nvidia gained 0.82 percent and Intel jumped 4.03 percent, helping the Philadelphia Semiconductor Index rise 0.63 percent.
Korea's two largest chipmakers, however, moved in opposite directions.
Samsung Electronics gained 0.6 percent to 254,750 won, while SK hynix slipped 0.3 percent to 1,754,000 won.
Doosan Enerbility rose 2.5 percent and Hanwha Ocean gained 3.2 percent, while Hyundai Motor fell 3.5 percent and Samsung Electro-Mechanics declined 1.4 percent.
Defense, aerospace and shipbuilding stocks were leaders of the market.
Aerospace and defense shares climbed 5.6 percent, while shipbuilding stocks rose 5.5 percent. SpaceX-related stocks gained 7.5 percent as a theme, while the broader aerospace theme advanced 6.6 percent.
The moves followed news that SpaceX is preparing to send its Starship spacecraft into Earth orbit for the first time during an upcoming test flight.
Sensorview surged 20.2 percent and Spear gained 9.8 percent. Earlier in the session, Kenkoa Aerospace, Contec and other aerospace-related names also posted sharp gains.
Hyundai Pharmaceutical was another standout, rising 7.1 percent to 10,680 won after the government said it aims to introduce abortion medication in Korea by the first quarter of next year.
The secondary KOSDAQ gained 0.7 percent to 821.63 after rising as high as 823.58.
AJP Takeaways
- KOSPI up 0.6% at 6,756.11 as the market absorbed the Fed’s 25-basis-point rate hike.
- Foreign selling persists: Overseas investors sold a net 565.5 billion won of KOSPI shares, while retail investors remained net buyers.
- Leadership shifts beyond chips: Samsung Electronics edged higher while SK hynix slipped, with defense, aerospace and shipbuilding stocks leading gains instead.
Retail investors bought a net 32.9 billion won and institutions purchased 4.7 billion won, while foreign investors sold a net 38.6 billion won.
Among actively traded KOSDAQ stocks, Seongho Electronics jumped 19.6 percent, Hana Micron gained 7.3 percent and Jusung Engineering rose 1.98 percent.
Oil prices provided some relief after sharp gains earlier in the week.
West Texas Intermediate crude fell 0.3 percent to around $102.20 a barrel, while Brent crude slipped 0.03 percent to $105.80.
The decline followed reports that Saudi Arabia plans to restore about half the capacity of its East-West pipeline within days, easing concerns over supply routes that bypass the Strait of Hormuz.
The Korean won weakened to around 1,379 per dollar as the Fed's hawkish stance supported the U.S. currency.
Throughout Asia, Japan's Nikkei 225 gained 0.5 percent to 64,246.36 and China's Shanghai Composite edged up 0.13 percent to 3,896.51.
Hong Kong moved in the opposite direction, with the Hang Seng Index falling 0.9 percent to 24,490.04.
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