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Seoul stocks end lower amid Fed rate hike woes

By Yonhap

Published : Feb. 6, 2023 - 16:17

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

Seoul shares ended lower Monday, as strong US jobs data fueled fears of further rate hikes to tame inflation. The Korean won fell sharply to a monthly low against the US dollar.

The benchmark Korea Composite Stock Price Index fell 42.21 points, or 1.7 percent, to close at 2,438.19 points.

Trading volume was moderate at 554 million shares worth some 7.54 trillion won ($6 billion), with decliners outnumbering gainers 464 to 416.

On Friday, the Dow Jones Industrial Average dropped 0.4 percent, and the tech-heavy Nasdaq Composite sank 1.6 percent.

The Fed raised the benchmark lending rate by 25 basis points Wednesday as expected, and its Chair Jerome Powell said the US central bank needs "substantially more evidence" to be confident that inflation is on a downward path.

Institutions and foreigners sold a combined 817 billion won worth of stocks, offsetting individuals' stock purchases valued at 791 billion won.

The jobs data showed US companies hired twice as many people in January as the previous month, raising worries of more rate hikes by the Fed to slow economic activity, analysts said.

"In today's session, foreigners offloaded risky assets to seek safe havens, like the dollar, as the Fed is likely to keep its monetary tightening," Park Hee-cheol, an analyst at Mirae Asset Securities Co., said.

In Seoul, most large-cap stocks declined.

Market bellwether Samsung Electronics Co. fell 3.5 percent to 61,600 won, and No. 2 chipmaker SK hynix Inc. declined 3.4 percent to 89,100 won, while top carmaker Hyundai Motor Co. dropped 1.2 percent to 170,700 won and leading car battery maker LG Energy Solution shed 1.9 percent to 525,000 won.

Among gainers, No. 2 full-service carrier Asiana Airlines Inc. rose 0.3 percent to 14,970 won, leading budget carrier Jeju Air Co. jumped 4.3 percent to 16,890 won, and leading home appliance maker LG Electronics Inc. was up 0.8 percent to 101,600 won.

The local currency traded at 1,252.80 won against the US dollar, down 23.4 won from the previous session's close, marking the biggest loss since Dec. 6. Also, it is the weakest won-dollar rate since Jan. 6. (Yonhap)