SEOUL– Seoul shares slumped by over 1 percent to extend their losing streak to the fourth session Friday, weighed down by concerns about inflation and a slowdown in the global economy. The Korean won steeply fell against the U.S. dollar.
The benchmark Korea Composite Stock Price Index (KOSPI) retreated 29.57 points, or 1.13 percent, to close at 2,595.87 points. The key index fell 2.8 percent from a week ago.
Trading volume was moderate at about 712 million shares worth some 8.1 trillion won (US$6.4 billion), with losers outnumbering gainers 616 to 256.
Institutions sold a net 284 billion won and foreigners offloaded 839 billion won, while retail investors bought 1.1 trillion won.
After a weak start on the U.S. stock plunge, the KOSPI continued to lose ground.
Investors are spooked by the European Central Bank’s signal to raise the policy interest rate in July and September. The U.S. consumer price index for May will be released Friday (U.S. time).
Overnight, the tech-heavy Nasdaq composite retreated 2.75 percent, and the Dow Jones Industrial Average declined 1.94 percent amid concerns the Federal Reserve may push for more aggressive monetary policies if the May consumer price growth turns out higher than expected.
Investors are also worried about the growing possibility of stagflation, as growth outlooks for major economies are slashed by the World Bank and others.
“The U.S. consumer price index is the first thing on investors’ minds, and there is the (Fed’s) FOMC meeting coming up next week. Foreigners turned back to selling (in June), limiting the KOSPI’s rebound,” said Eugene Investment & Securities analyst Huh Jae-hwan.
Most large caps closed lower in Seoul.
Market bellwether Samsung Electronics lost 2.15 percent to a fresh yearly low of 63,800 won, and No. 2 chipmaker SK hynix slid 1.9 percent to 103,500 won.
The country’s largest chemical company, LG Chem, shed 1.02 percent to 583,000 won, with internet portal giant Naver dropping 1.1 percent to 270,000 won.
Bio heavyweight Samsung Biologics closed unchanged at 811,000 won, while top automaker Hyundai Motor added 1.1 percent to 184,500 won.
The local currency closed at 1,268.9 won against the U.S. dollar, plunging 12 won from the previous session’s close.
Bond prices, which move inversely to yields, closed lower. The yield on three-year Treasurys jumped 10.4 basis points to 3.275 percent, and the return on the benchmark five-year government bond added 3.8 basis points to 3.452 percent.
Source: Yonhap News Agency