SEOUL– South Korean stocks tumbled to an almost 14-month low Tuesday as investors are bracing for hawkish comments from the U.S. Federal Reserve. The Korean won fell against the U.S. dollar.
The benchmark Korea Composite Stock Price Index (KOSPI) plunged 71.61 points, or 2.56 percent, to close at 2,720.39 points. The reading marks the lowest number since the 2,700.93 point closing on Dec. 8, 2020.
Trading volume was moderate at about 630 million shares worth some 11.5 trillion won (US$9.6 billion), with losers outnumbering gainers 862 to 55.
Foreigners dumped a net 463 billion won worth of stocks and institutions offloaded 171 billion won, while retail investors bought 586 billion won.
After a weak start, the key stock index plummeted quickly amid massive foreign sell-offs.
Stocks extended their losing streak to a third session, largely as investors are worried that the U.S. central bank may hint at more hawkish policies than the market consensus.
The Federal Reserve is scheduled to end its two-day monetary policy meeting Wednesday (local time), which is expected to give clues on its monetary policy direction.
South Korea’s record high virus tally also added to the concerns about stronger quarantine measures.
It marked the first time that the daily caseload has surpassed the 8,000 mark since the country reported the first COVID-19 infection on Jan. 20, 2020.
“It seems like stock investors’ appetite for risky assets seems to have withered (in today’s trading),” Meritz Securities analyst Lee Jin-woo said.
Most large caps closed down in Seoul.
Market bellwether Samsung Electronics lost 1.46 percent to 74,000 won, and No. 2 chipmaker SK hynix decreased 0.84 percent to 118,000 won.
Giant battery maker LG Chem slumped 4.17 percent to 643,000 won, with Samsung SDI dipping 5.87 percent to 642,000 won. Internet portal operator Naver lost 1.98 percent to 322,000 won.
Pharmaceutical behemoth Samsung Biologics declined 3.82 percent to 780,000 won, and leading carmaker Hyundai Motor retreated 1.27 percent to 194,500 won.
The local currency closed at 1,198.6 won to the U.S. dollar, down 2.5 won from the previous session’s close.
Bond prices, which move inversely to yields, closed lower. The yield on three-year Treasurys added 6.2 basis points to 2.174 percent, and the return on the benchmark five-year government bond rose 5.7 basis points to 2.393 percent.
Source: Yonhap News Agency