(LEAD) Seoul shares spike for 5th straight day on chip rally

South Korean stocks surged for the fifth consecutive day on Friday, driven by a rally in chipmaker shares. The Korean won strengthened against the U.S. dollar. The benchmark Korea Composite Stock Price Index (KOSPI) finished the day up 164.60 points, or 2.42 percent, at 6,977.94. Trade volume was steady at 416 million shares, totaling 26.73 trillion won ($18.8 billion), with the number of gaining stocks outnumbering the losers 675 to 204.

Foreign investors bought a net 3.04 trillion won worth of shares, offsetting 3 trillion won in net selling by institutions and individuals. In the preceding 24 hours, U.S. stocks had rallied on stronger-than-anticipated July inflation data. The Dow Jones Industrial Average rose 0.13 percent, while the Nasdaq Composite gained 0.81 percent.

Investors' concerns eased as expectations grew that the U.S. Federal Reserve might postpone interest rate increases if inflation remains stable, according to analysts. Samsung Electronics, a market bellwether, climbed 2.4 percent to 274,500 won. SK hynix, another chipmaker, gained 3.26 percent to 1.65 million won. Hyundai Motor, a major carmaker, jumped 8.2 percent to 453,000 won, while shipbuilder Hanwha Ocean rose 5.6 percent to 95,800 won.

Among the decliners, defense companies Hanwha Aerospace and LIG Defense & Aerospace fell 2.1 percent and 2.6 percent respectively, to 1.16 million won and 815,000 won respectively. The Korean won closed at 1,418.3 won per U.S. dollar, up 1.1 won from the previous day's close.