An electronic board showing the Korea Composite Stock Price Index (Kospi) at a dealing room of the Hana Bank headquarters in Seoul on Monday. (Yonhap)
South Korean stocks fell for a second straight session to retreat more than 1.5 percent Monday, as worries over the US Federal Reserve signaling an aggressive rate hike next week dampened investor sentiment. The local currency fell against the US dollar.
The Korea Composite Stock Price Index (Kospi) closed down 1.76 percent, or 47.58 points, to 2,657.13. Trading volume was heavy at 988.3 million shares with decliners far outpacing gainers 761 to 142.
Foreigners unloaded a net 733.7 billion won ($586.1 million) worth of local equities, with institutions selling off a net 348 billion won. Retail investors scooped up a net 1.06 trillion won.
“The Fed’s move for a rate hike has widely been expected since its March minutes were released, but the hawkish remarks last week by Fed Chairman Powell amplified the concerns about bolder than expected monetary tightening,” Han Ji-young, an analyst at Kiwoom Securities Co.
Fed Chairman Jerome Powell indicated last week it will accelerate the monetary tightening with a series of rate increases this year to tame the inflation, possibly starting with a 0.5 percentage-point rate hike in its next policy meeting set for May 3-4.
Interest rate hikes mean higher borrowing costs for businesses and households, and it can slow the economy.
Stocks will move in volatile sessions this week, hinging on the outcome of the first-quarter business performance by major South Korean companies, Han added.
Tech large-caps, susceptible to rate hikes, led the overall market decline.
Market behemoth Samsung Electronics slid 1.04 percent to 66,300 won, and chip giant SK hynix lost 2.26 percent to 108,000 won.
Other tech blue-chips also lost ground, with top Internet portal operator Naver falling 3.83 percent to 288,500 won and its rival Kakao dipping 2.5 percent to 89,700 won.
Top automaker Hyundai Motor pared earlier losses and closed the session 1.11 percent higher to 182,000 won, after it reported the largest first-quarter operating profit in nearly eight years.
Major vaccine maker SK Bioscience surged 6.67 percent to 136,000 won on news that the clinical test on the candidate substance under development for its COVID-19 vaccine showed successful immunity results.
Lotte Fine Chemical also jumped 5.95 percent to 89,000 won, buoyed by the outlook that it will benefit from Indonesia’s recent ban on the palm oil export.
The local currency ended at 1,249.90 won against the US dollar, down 10.8 won from Friday’s close, as investors opted for safer assets amid uncertainties over the global economy. (Yonhap)
By Kim Young-won (email@example.com)