(2nd LD) Seoul shares spike for 5th straight day on chip rally

South Korean shares surged for the fifth consecutive day on Friday, driven by strong performance of major chipmakers. The Korean won appreciated against the U.S. dollar. The benchmark Korea Composite Stock Price Index (KOSPI) finished at 6,977.94, up 164.60 points or 2.42 percent. Trading volume was moderate at 416 million shares worth 26.73 trillion won, with more gains than losses.

Foreign investors bought a net 3.04 trillion won worth of shares, balancing out 3 trillion won in selling by institutions and individuals. U.S. stocks rallied on stronger-than-expected July inflation data. The Dow Jones Industrial Average increased 0.13 percent, while the tech-focused Nasdaq Composite rose 0.81 percent. Concerns eased as expectations grew that the U.S. Federal Reserve might postpone interest-rate hikes if inflation remains stable.

Samsung Electronics, a market bellwether, gained 2.4 percent to 274,500 won, while chipmaker SK hynix rose 3.26 percent to 1.65 million won. Hyundai Motor and shipbuilder Hanwha Ocean also saw significant gains of 8.2 percent and 5.6 percent, respectively. Decliners included defense companies Hanwha Aerospace and LIG Defense & Aerospace, which fell 2.1 percent and 2.6 percent, respectively.

The Korean won closed at 1,418.3 per U.S. dollar, up 1.1 from the previous day's close. Bond prices, which move inversely to yields, fell, with the yield on three-year Treasurys rising 1.5 basis points to 3.796 percent and the return on five-year government bonds increasing 3.1 basis points to 4.047 percent.