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Seoul shares up for third day after Fed rate hike; won at over 1-month high

March 23, 2023 - 16:29 By Yonhap
An electronic board showing the Korea Composite Stock Price Index at a dealing room of the Hana Bank headquarters in Seoul on Thursday. (Yonhap)

South Korean stocks rose for a third day Thursday on big-cap tech gains after the US Federal Reserve raised the interest rates by a widely expected margin amid lingering concerns over a global banking turmoil, analysts said. The local currency rose sharply against the US dollar.

After choppy trading, the benchmark Korea Composite Stock Price Index rose 7.52 points, or 0.31 percent, to close at 2,424.48. Trading volume was moderate at 558.79 million shares worth 10.18 trillion won ($7.95 billion), with decliners outpacing gainers 667 to 223.

Foreigners and institutions bought a net 214.3 billion won and 216 billion won worth of shares, respectively, while individuals sold a net 413.22 billion won worth of shares.

The index opened markedly lower, tracking overnight losses on Wall Street, but most earlier gains were erased, and bobbed in and out of positive terrain before ending higher.

On Wednesday, the Fed raised its key rate by 25 basis points to a range of 4.75 percent to 5 percent, the ninth rate hike in a row.

Traders had forecast a 50 basis point increase before a series of failures by American banks earlier this month sparked fears of a global banking crisis. Swiss authorities also pushed for the takeover of troubled Credit Suisse by UBS earlier this week.

"The Fed's rate decision met market expectations. But volatility could grow bigger at least in the short run due to uncertainties over possible additional bank system failures in the world and policy discord over the funding for bank deposit insurance in the US," Kiwoom Securities analyst Han Ji-young said.

Investors remained wary about the impact of high borrowing costs on the financial system, as Chair Jerome Powell dismissed any rate cuts this year to curb inflation, and US Treasury Secretary Janet Yellen said her government is not considering "blanket insurance" for all US bank deposits.

In Seoul, big-cap tech shares gathered ground.

Samsung Electronics surged 1.96 percent to 62,300 won, and chip giant SK hynix spiked 1.84 percent to 88,500 won.

Leading battery maker LG Energy Solution added 0.35 percent to 575,000 won, and Samsung SDI jumped 1.91 percent to 746,000 won. LG Chem also climbed 1.28 percent to 712,000 won.

Carmakers ended mixed, with top automaker Hyundai Motor inching up 0.11 percent to 180,500 won, while its affiliate Kia fell 0.63 percent to 78,400 won.

Platform operators fell, as internet giant Naver sank 1.45 percent to 204,000 won, and Kakao, the operator of the popular mobile messenger KakaoTalk, dived 1.75 percent to 61,600 won.

Major bio shares also lost ground. Samsung Biologics dropped 1.48 percent to 798,000 won, and Celltrion tumbled 1.02 percent to 154,500 won.

The local currency ended at 1,278.3 won against the US dollar, up 29.4 won from the previous session's close, the highest since Feb. 14 this year, when the corresponding reading was 1,269.4. The daily rise was also the sharpest in more than 4 months. (Yonhap)