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Seoul shares fall nearly 1% on tech plunge, concerns over US inflation data

An electronic board showing the Korea Composite Stock Price Index (Kospi) at a dealing room of the Hana Bank headquarters in Seoul last Thursday. (Yonhap)
An electronic board showing the Korea Composite Stock Price Index (Kospi) at a dealing room of the Hana Bank headquarters in Seoul last Thursday. (Yonhap)

South Korean stocks fell Wednesday, with tech heavyweight Samsung Electronics dipping 1.5 percent, dented by dismal earnings projections by big US tech firms, like Micron Technology Inc., that pointed to a further slowdown in global chip demand.

Analysts say investor sentiment remains cautious with eyes on US consumer prices, due to be announced Wednesday (US time), as it will provide a clue as to how fast the US Federal Reserve will push for monetary tightening going forward.

The Korea Composite Stock Price Index (KOSPI) retreated 22.58 points, or 0.9 percent, to 2,480.88. Trading volume was moderate at 471.7 million shares worth 8.9 trillion won ($6.8 billion) with decliners outpacing gainers 567 to 301.

"The waning chip demand is not getting any better, as opposed to how we're seeing improvement from the supply side," Han Ji-young, an analyst at Kiwoom Securities Co.

"Rather than the supply side, high inflation and the US rate hike pressure seem to be causing the demand to slow," Han said, adding stocks will move tepidly for the time being, with all eyes on the July US consumer prices.

Major US indexes fell Tuesday (local time) after Micron said it expects weaker quarterly earnings due largely to waning PC and smartphone demand. The forecast sent Micron's shares tumbling 3.7 percent.

Micron's forecast follows a similar dim earnings projection earlier by US chipmaker Nvidia Corp., which said it expects a 19-percent on-quarter decline in second-quarter revenue.

The rising probability of another sharp rate hike by the Federal Reserve in its September policy meeting adds to the market jitters, Han noted.

In Seoul, top-cap Samsung Electronics dived 1.5 percent to 59,100 won. Chip giant SK hynix slumped 3.47 percent to 458,000 won. Top automaker Hyundai Motor also fell 0.52 percent to 192,500 won, and leading chemical manufacturer LG Chem fell 3.43 percent to 648,000 won.

Major IT companies were also among the decliners. Internet portal provider Naver dropped 1.13 percent to 262,000 won, with platform giant Kakao dipping 3.49 percent to 80,300 won.

Construction companies and steelmakers advanced. Hyundai Engineering & Construction jumped 7.54 percent to 46,350 won, and Posco Holdings rose 1.02 percent to 248,500 won.

The local currency ended at 1,310.40 won against the US dollar, down 5.8 won from Tuesday's close. (Yonhap)

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