Seoul: South Korean stocks traded higher late Tuesday morning, led by tech gains, as investors harbored hopes for the government's market-friendly tax reform measures and the Federal Reserve's interest rate cuts. The benchmark Korea Composite Stock Price Index (KOSPI) added 26.31 points, or 0.82 percent, to 3,245.90 as of 11:20 a.m. The index opened slightly higher and had extended gains further on foreign buying.
According to Yonhap News Agency, investor sentiment was buoyed by Wall Street rallies overnight, as a weaker-than-expected August jobs report reinforced expectations that the Fed would start reducing rates soon. The Dow Jones Industrial Average rose 0.25 percent, and the tech-heavy Nasdaq composite gained 0.45 percent. The S and P 500 index went up 0.21 percent. Also affecting the sentiment is that Finance Minister Koo Yun-cheol on Monday hinted at the possibility of revising the government's earlier proposal on the criteria for major shareholders subject to capital gains tax on stock transactions.
The finance ministry had previously proposed lowering the threshold for capital gains tax on stock holdings from 5 billion won (US$3.61 million) to 1 billion won, a move that has drawn criticism from investors. Tech shares led the upturn of the index. Market bellwether Samsung Electronics rose 1 percent, while chip giant SK hynix surged 2.71 percent. Leading battery maker LG Energy Solution advanced 1.16 percent, and top chemical firm LG Chemical spiked 4.36 percent.
Major bio company Samsung Biologics grew 0.38 percent, and nuclear power plant manufacturer Doosan Enerbility gained 0.66 percent. Carmakers gathered ground. Top automaker Hyundai Motor grew 0.69 percent, while its sister affiliate Kia went up 0.38 percent. Leading financial firm KB Financial climbed 0.94 percent, and No. 1 steelmaker POSCO increased 1.79 percent. But defense giant Hanwha Aerospace dipped 0.63 percent, and leading shipbuilder HD Hyundai Heavy shed 0.2 percent. Hanwha Ocean edged up 0.09 percent.
The local currency was trading at 1,385.3 won against the U.S. dollar at 11:20 a.m., up 5.3 won from the previous session.