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Seoul shares open sharply higher as Fed's rate hike comes within market estimate

An electronic board showing the Korea Composite Stock Price Index (Kospi) at a dealing room of the Hana Bank headquarters in Seoul last Wednesday. (Yonhap)
An electronic board showing the Korea Composite Stock Price Index (Kospi) at a dealing room of the Hana Bank headquarters in Seoul last Wednesday. (Yonhap)

Seoul shares got off to a strong start Thursday, tracking overnight rallies on Wall Street, after the US Federal Reserve delivered a rate hike that met market expectations.

The Korea Composite Stock Price Index (KOSPI) rose 45.43 points, or 1.86 percent, to 2,492.81 points in the first 15 minutes of trading.

Overnight, US shares closed higher after the Fed hiked the key rates by 0.75 percentage point, the largest increase since 1994, to tame high-flying inflation.

There had been worries that the Fed would raise the rate by 1 percentage point in the face of accelerating inflation in the world's largest economy.

The Fed also signaled it could raise the rates by the similar margin next month to bring inflation under control.

The Dow Jones Industrial Average rose 1.0 percent, and the tech-heavy Nasdaq composite advanced 2.5 percent.

On Wednesday, the South Korean index fell to a 19-month low to extend its losing streak to a seventh session amid uncertainties about the US central bank's monetary policy path and concerns over a global economic recession.

In Seoul on Thursday, most large-cap shares traded higher on bargain hunting, with tech and bio shares leading the upturn.

Market bellwether Samsung Electronics rose 1.8 percent, and No. 2 chipmaker SK hynix advanced 2.66 percent.

Major battery maker LG Energy Solution jumped 3.45 percent, and chemical giant LG Chem surged 3.92 percent.

Samsung Biologics added 2.66 percent and Celltrion grew 1.64 percent.

Carmakers also gained ground, with Hyundai Motor increasing 1.4 percent and its smaller affiliate Kia going up 1.02 percent.

The local currency traded at 1,278.15 won against the US dollar as of 9:15 a.m., up 12.35 won from the previous session's close. (Yonhap)

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