The Korea Herald

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Seoul shares fall for 2nd day after US rate pause

By Yonhap

Published : June 15, 2023 - 16:22

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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 Korean stocks fell for the second straight day Thursday, as investors digested the US Federal Reserve's first pause in its aggressive rate hikes in more than a year and its signal that the borrowing rates will likely rise more. The local currency inched down against the US dollar.

The benchmark Korea Composite Stock Price Index slid 10.54 points, or 0.4 percent, to 2,608.54. Trading volume was moderate at 571.7 million shares worth 11.3 trillion won ($8.82 billion), with decliners outnumbering gainers 627 to 243.

"The revised rate outlook further weakens the expectation for an early rate cut by the Fed. After the FOMC in May, market watchers are increasingly leaning toward the view that chances of seeing a rate cut this year are slim," Kim Young-hwan, an analyst at NH Investment & Securities Co., said.

The Fed held the interest rates steady in the range of 5 percent to 5.25 percent in its policy meeting Wednesday, the first such pause in the series of rate hikes that had continued for the past 15 months to tame runaway inflation.

Yet the US central bank signaled more rate hikes to come by the end of this year, as monetary tightening needs to be maintained, citing the persistent inflation and a stronger-than-expected economy.

The projection for the interest rates was revised up to a 5.50 percent to 5.75 percent range, meaning the Fed could raise it by another half a percentage point.

On the Kospi, large-cap bio and steel stocks led the decline. Biotech company Samsung Biologics fell 0.77 percent to 778,000 won, and steel giant Posco Holdings lost 1.4 percent to 386,000 won.

Tech heavyweight Samsung Electronics shed 0.56 percent to 71,500 won.

Top chemicals company LG Chem and internet portal provider Naver were among the gainers, closing up 0.42 percent to 722,000 won and 0.65 percent to 200,500 won, respectively.

Hybe, the entertainment agency behind BTS, rose 2.91 percent to 300,500 won.

The local currency ended at 1,280.50 won against the US dollar, down 2 won from Wednesday's close. (Yonhap)