South Korean stocks closed lower Friday, dampened by the bigger-than-expected interest rate hike by the Bank of England (BOE) and U.S. Federal Reserve Chairman Jerome Powell's hawkish remarks backing more rate hikes. The local currency fell against the U.S. dollar.
The benchmark Korea Composite Stock Price Index (KOSPI) retreated 23.60 points, or 0.91 percent, to 2,570.10. Trading volume was moderate at 517 million shares worth 8.33 trillion won (US$6.38 billion) with decliners outstripping gainers 720 to 174.
"Most countries are sticking to the tightening policy, although their interest rates are not as high as that of the United States yet. We expect the rates will continue to differ by country depending on the employment situation," Han Ji-young, an analyst at Kiwoom Securities Co. said.
The BOE on Thursday (local time) decided to raise its interest rate by 0.5 percentage point to 5.0 percent, beating the market forecast of 0.25 percentage point.
On Thursday (U.S. time), Powell reaffirmed the need for more interest rate hikes as he wrapped up his two-day testimony before Congress.
He said there is a still long way before the Fed stops the interest rate hike campaign and that the market needs further rate increases.
In Seoul, shares lost ground across the board, with chemical and auto large-caps leading the decline.
Top chemicals producer LG Chem fell 1.66 percent to 709,000 won and Hyundai Motor, the country's No. 1 auto manufacturer, lost 1.04 percent to 199,900 won.
Top battery maker LG Energy Solution sank 1.05 percent to 563,000 won.
Tech heavyweight Samsung Electronics was among a handful of gainers.
It finished up 0.42 percent to 71,600 won, echoing the solid tech gains on Wall Street after Amazon.com Inc. said it is spending US$100 million to build a generative artificial intelligence program to provide more customized services for users.
The local currency ended at 1,304.20 won against the U.S. dollar, down 9.3 won from Thursday's close.
Source: Yonhap News Agency