The Korea Herald


Seoul shares up for 5th day amid looming recession; Korean won sharply up

By Yonhap

Published : April 13, 2023 - 16:20

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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 Thursday. (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 Korea's main stock market closed higher to extend its winning streak to a fifth day Thursday amid the US Federal Reserve's warning of a recession later this year. The local currency rose sharply against the US dollar.

After choppy trading, the benchmark Korea Composite Stock Price Index gained 11.02 points, or 0.43 percent, to 2,561.66, managing to extend the winning streak for five straight sessions.

Trading volume was high at 826.7 million shares worth 11.7 trillion won ($8.93 billion), with gainers outnumbering decliners 535 to 330.

The market bobbed in and out of negative terrain but closed higher on growing optimism that China's better-than-expected exports may boost outbound shipments by Asia's fourth-largest economy.

"It's an official outlook from Fed officials in the (Federal Open Market Committee) minutes that the economy will fall into a 'mild recession' in the second half," Han Ji-young, an analyst at Kiwoom Securities Co., said.

"That spurred market uncertainties and unnerved investors," Han said.

The Fed's minutes from the March policy meeting showed some officials forecasting a "mild recession" later this year, with concerns over the liquidity crisis at the banking sector sparked by the collapse of Silicon Valley Bank.

But such worries are unlikely to derail the Fed's move to keep its restrictive monetary policy, as US inflation data, released Wednesday, showed the prices, excluding volatile food and energy, staying well above the Fed's 2 percent range target in March.

The data bolstered bets the Fed will go ahead with another quarter-point rate hike at the end of its policy meeting in May.

Shares closed mixed in Seoul, with blue chip tech and bio companies ending higher. Metal stocks declined.

Tech giant Samsung Electronics added 0.15 percent to 66,100. Top battery maker LG Energy Solution rose 1.53 percent to 599,000 won.

Biotech firm Samsung Biologics advanced 1.88 percent to 815,000 won.

Steelmaker Posco Holdings sank 3.69 percent to 391,500 won, and Korea Zinc, a nonferrous metal smelter, fell 1.65 percent to 535,000 won.

The local currency ended at 1,310.4 won against the US dollar, up 15.3 won from Wednesday's close, on news that South Korea's central bank and state pension operator have agreed to open a currency swap line as part of efforts to ease market volatility.

The agreement, which will run through the end of this year, will allow the National Pension Service to borrow up to $35 billion from the foreign reserves of the Bank of Korea in exchange for its local currency holdings, according to the BOK and the finance ministry. (Yonhap)