SEOUL– South Korean stocks traded lower late Friday morning as the U.S. Federal Reserve chief signaled interest rates would be aggressively raised.
The benchmark Korea Composite Stock Price Index (KOSPI) retreated 31.11 points, or 1.14 percent, to trade at 2,697.1 points as of 11:20 a.m.
Stocks got off to a lackluster start, tracking overnight Wall Street losses. The tech-heavy Nasdaq composite shed more than 2 percent, and the Dow Jones Industrial Average dropped some 1 percent.
Fed Chair Jerome Powell has signaled the U.S. central bank will have to move more aggressively to counter inflation.
The market is expecting the Fed may raise its policy interest rates by 0.5 percentage point in May, the steepest hike since 1982.
Powell said the rate hike by such a margin is an open option in order to reign in the high price pressure.
The Fed has emphasized that multiple rate hikes would take place this year to vent the inflation pressure.
Tech, usually more sensitive to borrowing costs, led the overall market decline.
Market behemoth Samsung Electronics lost 1.03 percent, with No. 2 chipmaker SK hynix decreasing 2.21 percent.
Internet portal operator Naver moved down 2.91 percent, and top carmaker Hyundai Motor shed 1.37 percent. Bio heavyweight Samsung Biologics slid 0.87 percent.
The local currency further weakened in the late morning on the hawkish Fed, trading at 1,243.15 won against the U.S. dollar, down 4.15 won from the previous session’s close.
Source: Yonhap News Agency