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Seoul stocks hit fresh 2-year highs on eased Fed rate concerns, foreign buying

South Korean stocks reached fresh highs in almost two years on Friday, extending the winning streak to a second day, on eased concerns over the pace of rate hikes in the US and extended foreign buying, analysts said. The Korean won rose against the US dollar.

The benchmark Korea Composite Stock Price Index advanced 4.5 points, or 0.67 percent, to close at 2,164.58. Trade volume was moderate at 297 million shares worth 4.83 trillion won ($4.27 billion), with gainers outnumbering losers 420 to 376.

The local stock market opened slightly lower tracking overnight losses on Wall Street, but rebounded on gains in top cap Samsung Electronics and other market heavyweights.

The KOSPI has been on a steady rise as foreign investors continued to scoop up local stocks, extending their buying binge to a 10th consecutive day following eased political chaos in Asia's fourth-largest economy and sound economic data.

"Given recent gains, investors will be tempted to cash in (recent rises)," said Seo Sang-young, an analyst at Kiwoom Securities. Analysts said the local stock market may take a breather down the road, but any sharp decline is unlikely.

Foreign investors snatched up a net 251 billion won worth of local stocks, extending their buying streak to a 10th consecutive day, while institutional investors offloaded a net 209 billion won.

Top cap Samsung Electronics rose 1.34 percent to end at a fresh record high of 2,120,000 won on optimism about its shareholder-friendly policies and robust earnings.

POSCO, the country's top steelmaker, closed flat at 291,500 won after rising 5.05 percent the previous session, and SK hynix, a major chipmaker, hit 46,750 won out of concerns over the downbeat outlook for the industry.

Hyundai Heavy Industries, a major shipyard, ended flat at 177,500 won after soaring 6.61 percent a day earlier on hopes that its spin-off plan would boost its financial status as well as the competitiveness of each unit.

AmorePacific, the country's top cosmetics maker, jumped 3.28 percent to end at 283,000 won, and its smaller rival LG Household & Healthcare, gained 1.95 percent to finish at 836,000 won.

Analysts said backed by improving economic conditions and corporate earnings, the local stock market is expected to build up further gains down the road.

"Compared with other markets, the local stock market is undervalued, and continued foreign buying may propel the KOSPI higher," said Lee Jong-woo, an analyst at IBK Investment & Securities.

The local currency closed at 1,130.90 won against the US dollar, up 1.1 won from the previous session's close. 

Bond prices, which move inversely to yields, closed sharply higher. The yield on three-year Treasurys fell 2 basis points to 1.675 percent, while the return on the benchmark five-year government bonds dropped 1.3 basis points to 1.868 percent. (Yonhap)