An electronic signboard at a Hana bank in Seoul shows the benchmark Korea Composite Stock Price Index surged 64.72 points, or 2.41 percent, to close at 2,754.86, while the local currency also rose sharply against the U.S. dollar to finish at 1,322.40 won against the greenback, March 21. Yonhap

Korean shares rallied by more than 2 percent Thursday amid growing hopes for U.S. rate cuts in the near future. The local currency also rose sharply against the U.S. dollar.

The benchmark Korea Composite Stock Price Index (KOSPI) surged 64.72 points, or 2.41 percent, to close at 2,754.86, the highest in nearly two years since April 5, 2022 when the index closed at 2,759.20.

Trade volume was heavy at 811.8 million shares worth 13.8 trillion won ($10.4 billion), with gainers outnumbering losers 655 to 217.

Both institutions and foreign investors extended their buying streak to a second consecutive session, each scooping up 1.05 trillion won and 1.87 trillion won worth of local shares, respectively. Retail investors remained net sellers for a second straight session, offloading a net 2.9 trillion won.

The market rally followed record high finishes on Wall Street, prompted by the outcome of the U.S. Federal Open Market Committee (FOMC) meeting that signaled up to three rate cuts within the year.

The Dow Jones Industrial Average climbed 1.03 percent to close at a new high of 39,512.13 on Wednesday (U.S. time), while the S&P 500 and Nasdaq also finished at record highs.

"At the FOMC meeting, the U.S. Fed maintained its plan for three rate cuts this year despite earlier concerns (over a potential delay in rate cuts)," Mirae Asset Securities analyst Kim Seok-hwan said.

"Benefits to the country's semiconductor industry and others that are sensitive to economic conditions may expand along with hopes for global economic recovery," added Kim.

Most large caps finished in positive terrain, with market kingpin Samsung Electronics adding 3.12 percent to 79,300 won, one day after its 5.63 percent spike on Wednesday.

No. 2 chipmaker SK hynix surged 8.63 percent to 170,000 won, while top pharmaceutical firm Celltrion gained 1.47 percent to 185,800 won.

Lead battery maker LG Energy Solution advanced 1.47 percent to 413,500 won, with its local rival Samsung SDI adding 0.55 percent to 455,500 won.

Top automaker Hyundai Motor soared 4.56 percent to 252,000 won, while its smaller affiliate Kia Motors remained flat at 115,700 won.

The local currency closed at 1,322.40 won against the greenback, up 17.40 won from the previous session's close.

Bond prices, which move inversely to yields, rose. The yield on three-year Treasurys lost 6.5 basis points to 3.306 percent, while the return on the benchmark five-year government bonds shed 5.0 basis points to 3.349 percent. (Yonhap)