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Seoul stocks hit 7-week low on inflation risk

By Yonhap
Published : Jan 17, 2022 - 16:15
Updated : Jan 17, 2022 - 16:15

The benchmark Korea Composite Stock Price Index (Kospi) figures are displayed at a dealing room of a local bank in Seoul, Monday. (Yonhap)

South Korean stocks dropped to their lowest in almost seven weeks on Monday as investors dumped holdings on concerns about mounting inflationary pressure. The Korean won fell against the US dollar.

The benchmark Korea Composite Stock Price Index (KOSPI) slid 31.82 points, or 1.09 percent, to close at 2,890.1 points. The reading marked the lowest closing since Nov. 30.

Trading volume was moderate at about 571 million shares worth some 9.8 trillion won ($8.2 billion), with losers outnumbering gainers 745 to 158.

Foreigners sold a net 252 billion won and institutions offloaded 259 billion won, while retail investors bought 483 billion won.

After a weak start, the key stock index fell below the 2,900-point level intraday for the first time in about six weeks and the losses extended later amid concerns over rising inflationary pressure at home and in the United States.

Last week, central banks in major countries, including the Bank of Korea and the US Federal Reserve, hinted at the possibility of aggressive monetary tightening this year.

Analysts partially attributed the KOSPI's loss to the upcoming mega initial public offering (IPO) of LG Energy Solution Ltd.

Ahead of the South Korean battery maker's IPO set for this month, investors were cashing in on overvalued stocks to join the process.

"Unlike their Asian peers, the local stock markets are lacking the (usual) liquidity, due to the upcoming blockbuster IPO event," Shinhan Investment Corp. analyst Choi Yoo-joon said.

"The Fed's hawkish policy issue is also having its sway on the markets," he added.

Most large caps closed lower in Seoul, led by foreign and institutional sell-offs.

Leading carmaker Hyundai Motor lost 1.91 percent to 205,000 won, with its smaller affiliate Kia retreating 1.31 percent to 82,700 won.

Market bellwether Samsung Electronics added 0.26 percent to 77,500 won, but No. 2 chipmaker SK hynix decreased 1.17 percent to 127,000 won.

Financial heavyweight KB Financial Group shed 1.61 percent to 61,200 won, and steelmaker POSCO moved down 2.17 percent to 292,500 won. Pharmaceutical giant Celltrion plunged 6.43 percent to 160,000 won in the wake of its alleged accounting fraud case.

The local currency closed at 1,192.7 won against the US dollar, down 5.4 won from the previous session's close. (Yonhap)

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