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Seoul's stocks down, currency dips to over 13-yr low following Fed's rate hike

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

South Korean stocks closed down on Thursday, as investors were spooked by growing worries over a global economic recession following the US Federal Reserve's sharp rate hike decision. The Korean won fell to a 13-year low against the US dollar.

The benchmark Korea Composite Stock Price Index (KOSPI) lost 14.9 points, or 0.63 percent, and closed at 2,332.31.

Trading volume was light at 436.1 million shares worth 7.3 trillion won, with decliners outnumbering gainers 579 to 299.

After starting low at the opening bell, the main bourse tumbled near the 2,300 mark but the losses were trimmed on bargain hunting.

Thursday's losses came after the Fed's overnight decision to raise its benchmark federal funds rate by 75 basis points for a third straight time, with its Chair Jerome Powell confirming his resolution to fight inflation "until the job is done."

The prospect of prolonged aggressive monetary tightening has stoked concerns that it could throw the US economy into a recession, boding ill for export-driven countries such as South Korea.

"A strong tightening stance from the FOMC meeting coupled with the Fed's pessimistic outlook on the economy had some impact on the main bourse today," analyst Lee Kyoung-min from Daeshin Securities said.

"We forecast the KOSPI could drop to the 2,000 mark as early as the end of this year. A declining trend is expected to continue on until the first half of next year."

Foreign and institutional investors sold off a combined 34.3 billion won worth of stocks in net value, while retail investors scooped up a net 31.4 billion won worth of equities.

In Seoul, most large cap stocks ended in negative territory, led by losses in semiconductors and other tech issues.

Market bellwether Samsung Electronics lost 1.63 percent and closed at a two-year low of 54,400 won.

No. 2 chipmaker SK hynix plunged 2.27 percent to 86,000 won.

Internet portal giant Naver shed 3.05 percent to 206,500 won, and mobile messenger operator Kakao dived 4.22 percent to 61,300 won.

Bio shares were mixed. Samsung Biologics inched down 0.13 percent to 785,000 won, while bio firm Celltrion stayed unchanged at 169,000 won.

The local currency ended at 1,409.7 won against the greenback, down 15.5 won from the Wednesday session's close. The won had fallen through the 1,400 mark for the first time since March 20, 2009, when the local currency ended at 1,412.50 won against the greenback. (Yonhap)

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