An electronic board showing the Korea Composite Stock Price Index at a dealing room of the Hana Bank headquarters in Seoul on Monday. (Yonhap)
South Korean stocks retreated Monday, weighed down by hard-line comments from some US Federal Reserve policymakers advocating more interest rate hikes. The local currency sharply fell against the US dollar.
The benchmark Korea Composite Stock Price Index slid 16.29 points, or 0.62 percent, to close at 2,609.5. Trading volume was moderate at 711.1 million shares worth 10.95 trillion won ($8.54 billion), with gainers outpacing decliners 466 to 401.
"The Fed officials with those comments are on a different path from what the market expects -- a turn to a dovish monetary policy," said Seo Sang-young, an analyst at Mirae Asset Securities Co.
"While market participants are optimistic about the pace of the decline in inflation, the Fed is watching out for the possibility that high inflation might stick around for longer," Seo said.
Wall Street finished lower Friday after Fed Gov. Christopher Waller said core inflation was not coming down like he expected. Richmond Fed President Thomas Barkin backed the idea of more rate hikes, citing persistent inflation.The comments threw cold water on the market betting that the Fed will end its interest rate hike campaign this year, after a highly expected 0.25 percentage-point increase next month.
Food and tech stocks drove the Kospi down, while construction and heavy equipment companies gained ground.
Noodle maker Nongshim plunged 6.06 percent to 411,500 won, after Finance Minister Choo Kyung-ho said the food industry needs to adjust prices in line with a slide in global wheat prices on a TV show Sunday.
Confectionary maker Orion slumped 4.52 percent to 122,500 won.
Tech behemoth Samsung Electronics lost 0.84 percent to 71,200 won. Top battery maker LG Energy Solution sank 4.59 percent to 561,000 won. Chip giant SK hynix dipped 3.45 percent to 114,800 won.
Hyundai Engineering & Construction gained 3.5 percent to 39,950 won. Aircraft engine maker Hanwha Aerospace spiked 17.55 percent to 137,300 won on a rosy earnings outlook.
The local currency ended at 1,282 won against the US dollar, down 10.1 won from Friday's close. (Yonhap)
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