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Seoul shares hit over 2-month low on prospect of another aggressive rate hike by US Fed

Sept. 19, 2022 - 16:42 By Yonhap
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 dipped by more than 1 percent on Monday to extend their losing streak to a fourth day as market sentiment was dampened by the prospect of another sharp rate hike this week by the US Fed.

The Korean won fell sharply against the US dollar.

After opening higher, the benchmark Korea Composite Stock Price index (KOSPI) shed 27.12 points, or 1.14 percent, to 2,355.66, marking the lowest since July 12 when the corresponding reading was 2,330.98.

Trading volume was light at 395.3 million shares worth 6.7 trillion won ($4.8 billion) with losers outpacing gainers 749 to 143.

The US Fed is set to hold a two-day policy meeting on Tuesday (US time).

"As the aftermath of the August US CPI (consumer price index) persists, investors are wary that the Fed could deliver a sharper-than-expected rate hike this week," said Jeong Tae-hyun, an analyst at Cape Investment & Securities Co.

Some experts predict that the Fed may jack up its base rate by up to a full percentage point, sharper than earlier expected 75-basis point.

Foreigners scooped up a net 697 million won worth of local equities, while institutions sold a net 41.8 billion won. Individual investors snapped up 27.5 billion won.

In Seoul, most large-cap shares closed mixed

Market bellwether Samsung Electronics gained 0.36 percent at 56,400 won, while its rival SK hynix shed 1.32 percent to 90,000 won.

Portal giant Naver inched down 0.91 percent to 218,000 won and Kakao retreated 2.24 percent to 65,400 won.

Battery maker LG Energy Solution dipped 5.63 percent to 477,500 won.

Auto shares were mixed, with top automaker Hyundai Motor adding 0.25 percent to 201,500 won, while its smaller affiliate, Kia, stepped down 0.37 percent to 80,800 won.

State-run utility Korea Electric Power Corporation (KEPCO) advanced 3.17 percent to reach 19,500 won buoyed by anticipation the government could raise electricity rate by a big margin next month.

The local currency continued to remain weak, closing at 1,398.6 won against the dollar, down 5.6 won from the previous session's close. (Yonhap)