Finance
Seoul shares edge up amid persistent rate hike concerns
Published : Aug 12, 2022 - 16:05
Updated : Aug 12, 2022 - 16:05
An electronic board showing the Korea Composite Stock Price Index (Kospi) at a dealing room of the Hana Bank headquarters in Seoul on Friday. (Yonhap)

South Korean stocks closed slightly higher Friday amid persistent worries about the US Federal Reserve's pace of its monetary tightening. The local currency ended almost unchanged against the US dollar.

After choppy trading, the Korea Composite Stock Price Index (KOSPI) added 4.16 points, or 0.16 percent, to 2,527.94. Trading volume was moderate at 437.8 million shares worth 7.89 trillion won ($6.05 billion), with gainers outstripping decliners 565 to 275.

US producer prices for July slowed at a faster pace than expected, giving more weight to the view that inflation is peaking out.

The data followed the softer-than-expected US consumer prices for July, released Wednesday (US time), seen as a sign of cooling inflation and raising expectations that the Fed will slow its aggressive rate hikes.

But uncertainty still persists as to how far the Fed will go in raising the interest rate, although the market's general forecast has been leaning toward a 0.75 percentage-point hike. The next policy meeting is set for September.

"At least the July inflation data helped prevent the worst scenario: failing to tame inflation, a more aggressive rate hike, killing demand and bringing a prolonged recession," Han Ji-young, an analyst at Kiwoom Securities Co., said.

The market will inevitably be influenced by the Fed uncertainty, Han said.

Market behemoth Samsung Electronics closed up 0.5 percent to 60,200 won after its Vice Chairman and de facto head Lee Jae-yong was granted a presidential pardon over a bribery case involving a former South Korean president.

No. 1 automaker Hyundai Motor rose 1.55 percent to 196,000 won, and steel giant Posco Holdings gained 0.97 percent to 259,500 won.

Posco's trading arm, Posco International, surged 9.31 percent to 24,650 won on the announcement that it is absorbing Posco Energy to accelerate the shift to green energy business.

Top battery maker LG Energy Solution fell 2.44 percent to 460,500 won. Leading container shipper HMM also slumped 3.56 percent to 24,400 won.

The local currency ended at 1,302.40 won against the US dollar, up 0.6 won from Thursday's close. (Yonhap)

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