SEOUL– Seoul shares closed lower Friday as concerns deepened over a global economic recession amid the U.S. Federal Reserve’s aggressive monetary tightening to tame surging inflation. The local currency fell against the U.S. dollar.
The Korea Composite Stock Price Index (KOSPI) lost 10.48 points, or 0.43 percent, to close at 2,440.93 after dipping to as low as 2,396.47. The key index fell 6.34 percent from a week ago.
Trading volume was moderate at 597.98 million shares worth 10.66 trillion won (US$8.27 billion), with decliners far outpacing gainers 562 to 305.
Foreign investors sold a net 691.21 billion won worth of shares, while institutions and retail investors bought a net 357.30 billion won and 276.62 billion won worth of shares, respectively.
The market opened sharply lower, tracking huge losses on Wall Street. In early trading, the index shed more than 2 percent to plunge below the 2,400 mark, the first time since Nov. 5, 2020 that the index dipped below 2,400.
But the market eventually recouped some of the losses as investors bought oversold shares.
Overnight, U.S. shares tumbled as renewed worries about a global economic downturn, one day after the Fed announced its decision to hike the key rates by 0.75 percentage point, the biggest increase since 1994, to fight high-flying inflation.
The Fed also indicated that it could raise the rates by the similar margin next month.
While there could be some positive momentum for the market, such as China’s stimulus package aimed at boosting its ailing economy, the market should brace for a potentially bigger rate increase by the Fed in July, Cho Byeong-hyun, an analyst from Daol Investment & Securities, said.
In Seoul, most big-cap shares were mostly closed lower Friday, as rate-sensitive tech stocks led the losses.
Market bellwether Samsung Electronics fell 1.81 percent to 59,800 won. It was the first time for the tech giant to close below 60,000 won since Nov. 4, 2020.
Both internet portal giant Naver and platform operator Kakao fell to fresh 52-week lows of 237,500 won and 70,200 won.
Major battery maker LG Energy Solution lost 0.35 percent to 425,500 won, and LG Chem went down 1.03 percent to 578,000 won.
Among gainers were K-pop powerhouse Hybe, which went up 0.34 percent to 148,500 won after diving 24.87 percent to 145,000 won the previous session following the news that BTS would halt group activities.
Samsung Biologics, the biotech arm of South Korea’s Samsung Group, jumped 3.1 percent to close at 832,000 won and pharmaceutical giant Celltrion added 2 percent to 153,000 won.
The local currency ended at 1,287.30 won against the U.S. dollar, down 1.7 won from the previous session’s close.
Bond prices, which move inversely to yields, closed lower. The yield on three-year Treasurys rose 1.7 basis points to 3.745 percent, and the return on the benchmark five-year government bond added 1.8 basis points to 3.855 percent.
Source: Yonhap News Agency