South Korean stocks slid over 1.7 percent Thursday, hit by sharp losses of big-cap shares after the U.S. Federal Reserve signaled it may push for an additional rate hike later this year after deciding to keep its benchmark lending rate unchanged this month. The local currency sharply slid against the U.S. dollar.
The benchmark Korea Composite Stock Price Index had declined 44.77 points, or 1.75 percent, to finish at 2,514.97.
The secondary KOSDAQ index lost 22.04 points, or 2.5 percent, to finish at 860.68.
Trading volume was a little thin at 384.6 million shares worth 7.7 trillion won (US$5.7 billion), with decliners far outpacing winners 796 to 116.
Individuals purchased a total of 766.9 billion won, while offshore investors and institutions sold off 65.3 billion won and 722.2 billion won worth of local shares, respectively.
Overnight, U.S. stocks closed lower, with the S&P 500 dropping almost 1 percent and the Nasdaq Composite plunging 1.53 percent amid a slide in tech giants, including Apple Inc. and Tesla Inc.
The Fed left its key rate steady at between 5.25 percent and 5.50 percent after the two-day Federal Open Market Committee (FOMC) meeting, but raised the possibility of another rate hike later this year in its pursuit of robust employment and price stability.
“We are prepared to raise rates further if appropriate, and we intend to hold policy at a restrictive level until we are confident that inflation is moving down sustainably toward our objectives,” Fed chair Jerome Powell said.
Kim Seok-hwan, an analyst at Mirae Asset Securities Co., said “the Asian stock markets underperformed overall due to concerns over the lengthening of the United States’ monetary tightening stance.”
“In particular, the slide in U.S. tech shares sparked by the Fed’s hawkish stance weighed down on local semiconductor and secondary battery stocks,” Kim added.
In Seoul, most of big-cap shares fell across the board.
Market bellwether Samsung Electronics lost more than 1 percent to 68,900 won, and No. 2 chipmaker SK hynix dropped 1.27 percent to 116,500 won.
Leading battery maker LG Energy Solution was down 2.5 percent to 487,000 won and its smaller rival Samsung SDI plunged 4.44 percent to 538,000 won.
Auto shares also lost ground.
Top carmaker Hyundai Motor retreated 1.54 percent to 191,900 won and its smaller affiliate Kia dropped 1.97 percent to 79,800 won.
IT stocks also ended in negative terrain.
Internet portal operator Naver lost 3.45 percent to 210,000 won, and Kakao, the operator of the country’s top mobile messenger, fell 3.08 percent to 45,650 won.
Steel giant POSCO Holdings lost 2.86 percent to 577,000 won and its battery component making affiliate POSCO Future M plunged 3.16 percent to 398,000 won.
Leading chemical producer LG Chem shot down 4.72 percent to 525,000 won, and major oil refinery SK Innovation also lost 3.28 percent to 159,000 won.
K-pop powerhouse Hybe plummeted more than 5 percent to 230,500 won.
The Korean won ended at 1,339.70 won against the U.S. dollar, down 9.6 won from Wednesday’s close.
Bond prices, which move inversely to yields, closed lower. The yield on three-year Treasurys added 4.0 basis points to 3.930 percent and the return on the benchmark five-year government bonds advanced 5.7 basis points to 3.973 percent.
Source: Yonhap News Agency