Published : Sept. 18, 2015 - 18:04
The uncertainty about financial volatility at home and abroad is expected to linger on until late October as the U.S. Federal Reserve decided to keep interest rates on hold in its September meeting amid split predictions in the market, analysts said Friday.
As Federal Reserve Chair Janet Yellen took an ambiguous position over the timing of an increase, South Korea’s financial indexes moved in a limited boundary on the day, despite the relief from a variety of risks upon a U.S. rate hike.
The benchmark KOSPI, which started in a bearish positon in the trading session, gained 19.46 points, or 0.98 percent to finish at 1,995.95.
A majority of local analysts had forecast that the main bourse index could easily break the 2,000 barrier if there were some dovish comments from the Fed -- irrespective of a hike or maintaining the current rate of 0-0.25 percent.
Financial indexes are seen at a currency trading office of KEB Hana Bank in Seoul, Friday. (Yonhap)
Foreigners and local institutional investors led the daily gain, while small investors maintained their net-seller positon for the fourth consecutive session.
Foreigners stopped their net-seller position for 29 consecutive sessions from Aug. 5 to Sept. 15 and began net-purchasing shares from Wednesday, a day before the Federal Open Market Committee meeting. Over those three sessions, they net-purchased equities worth 500 billion won ($430 million).
In contrast, individuals have offloaded about 1.2 trillion won worth shares since Tuesday.
The KOSPI has stayed below 2,000 points for more than a month after having reached 2,003.17 on Aug. 10.
Despite the rate freeze, the U.S. dollar has not lost much against the Korean currency. It fell 3.1 won from the previous session to close at 1,162.8 won.
The greenback hovered around 1,200 won in early September amid expectations of a rate hike -- or hawkish remarks from some FOMC members -- this month.
In their move to closely coordinate in the monitoring of the stock and currency market, Korea’s policymakers held a macroeconomic and financial policy meeting earlier in the day. “Volatility at home and abroad is likely to go on as it remains unclear when the Fed will start to raise the key rates,” said Vice Finance Minister Joo Hyung-hwan.
Joo raised the necessity of being more vigilant about the foreign exchange liquidity status.
The last two FOMC rate-setting meetings for 2015 -- of the eight scheduled -- will be held on Oct. 27-28 and Dec. 15-16, respectively, in Washington.
Yellen has not ruled out the possibility of a hike within the year, although she has also not clarified that the timing would certainly be this year.
The first three of the 2016 FOMC meetings are tentatively slated for Jan. 26-27, March 15-16 and April 26-27, respectively.
By Kim Yon-se (
kys@heraldcorp.com)