SEOUL – South Korean stocks experienced a downturn at the start of trading on Wednesday, influenced by overnight losses in the U.S. markets and diminishing expectations for early rate cuts by the Federal Reserve. The benchmark Korea Composite Stock Price Index (KOSPI) opened marginally higher but soon fell 14.13 points, or 0.57 percent, reaching 2,483.46 within the first quarter-hour of trading.
According to Yonhap News Agency, the decline in Seoul’s stock market was a reaction to the losses on Wall Street, where all three major U.S. indexes closed lower. These losses were partly attributed to comments made by Federal Reserve Governor Christopher Waller, who indicated a reluctance to rapidly reduce interest rates. Waller stated that while the Federal Reserve is nearing its 2 percent inflation target, there is no urgency to initiate rate cuts. This statement significantly impacted investor sentiments, leading to reduced expectations of early rate cuts by the Federal Reserve.
In Seoul, the majority of large-cap stocks, with the exception of those in the semiconductor industry, opened in the red. Notably, market leader Samsung Electronics saw a rise of 0.55 percent, and SK hynix, the second-largest chipmaker, increased by 0.91 percent. However, major losses were observed in other sectors. LG Energy Solution, a top battery manufacturer, saw its shares decrease by 1 percent. Samsung SDI and POSCO Future M, other key players in the market, also faced declines of 1.14 percent and 1.81 percent, respectively. The automotive sector was not spared, with Hyundai Motor and its affiliate Kia retreating by 0.81 percent and 1.34 percent.
The technology and biotechnology sectors also showed weaknesses. Shares of Naver, a leading internet portal operator, dropped by 0.22 percent, while Kakao, known for its popular mobile messaging service, fell by 0.67 percent. In the biotech industry, Samsung Biologics and Celltrion experienced declines of 0.78 percent and 1.97 percent. Additionally, steel giant POSCO Holdings and chemical leader LG Chem witnessed drops of 1.49 percent and 2.78 percent, respectively.
The South Korean currency also faced a downturn, trading at 1,341.20 won against the U.S. dollar, which is a decrease of 9.4 won from the previous session’s close. This decline in the currency value further reflects the cautious sentiment among investors in the Seoul market.