South Korean stocks closed slightly higher Tuesday tracking overnight Wall Street gains and on expectations the US Federal Reserve will start its rate-cutting cycle. The local currency fell against the US dollar.

The benchmark Korea Composite Stock Price Index gained 1.69 points, or 0.07 percent, to close at 2,568.55.

Trade volume was light at 364.2 million shares worth 8.06 trillion won ($6.16 billion). Losers, however, outpaced winners 523 to 361.

Overnight, the S&P 500 gained 0.5 percent to continue its weekslong rally and the Nasdaq 100 climbed 0.6 percent to hit a record high for the second consecutive session. The Dow Jones Industrial Average closed flat.

Last week, the Fed kept its rate unchanged and hinted at possible cuts for 2024.

"It appears that the US Federal Reserve is adopting an attitude receptive to anticipations of rate cuts in the financial markets," Roh Dong-kil, an analyst at Shinhan Securities, said.

He added that the outlook for US interest rate cuts has been "further strengthened."

In Seoul, tech and battery shares led the overall gains, with market bellwether Samsung Electronics adding 0.69 percent to end at 73,400 won and LG Energy Solution rising 0.95 percent to 426,000 won.

Top automaker Hyundai Motor also inched up 0.10 percent to 192,200 won and leading refiner SK Innovation climbed 0.95 percent to 138,800 won.

IT stocks lost ground, with internet portal operator Naver down 0.22 percent to finish at 222,500 won and Kakao, the operator of the country's top mobile messenger, slipping 0.19 percent to 53,800 won.

The local currency closed at 1,307.80 won against the greenback, down 10.60 won from the previous session's close. (Yonhap)