SEOUL– South Korean stocks extended losses late Thursday morning after the U.S. Federal Reserve signaled its plans for additional interest rate hikes next year.
The benchmark Korea Composite Stock Price Index (KOSPI) had fallen 20.72 points, or 0.86 percent, to 2,378.53 as of 11:20 a.m.
Overnight, the Dow Jones Industrial Average lost 0.4 percent to 33,966.35, and the tech-heavy Nasdaq Composite declined 0.8 percent to 11,170.89.
The decline came after the Federal Open Market Committee (FOMC) raised its benchmark rate by 50 basis points to a range of 4.25 percent to 4.5 percent. The policymakers forecast rates would end next year in a range of 5 percent to 5.25 percent, a higher level than previously indicated.
Fed Chair Jerome Powell said the Fed won’t reduce rates until it’s really confident that inflation is coming down in a sustained way.
The market is responding to the Fed’s hawkish position that they are going to raise rates to a higher level despite recent data showing an easing in inflation, analysts said.
Tech stocks were the lead decliners, with market behemoth Samsung Electronics Co. falling 1.5 percent, No. 2 chipmaker SK hynix dropping 1.7 percent and leading home appliance maker LG Electronics Inc. shedding 0.6 percent.
National flag carrier Korean Air Co. lost 1 percent, leading cosmetics firm AmorePacific Corp. dropped 2.3 percent and leading car battery maker LG Energy Solution was down 0.6 percent.
Among gainers, top carmaker Hyundai Motor Co. rose 0.3 percent, its affiliate Kia Corp. climbed 0.6 percent, the country’s sole aircraft manufacturer Korea Aerospace Industries Co. gained 1.9 percent, and the state-run Korea Electric Power Corp. was up 0.5 percent.
The local currency was trading at 1,303.05 won against the U.S. dollar as of 11:20 a.m., down 6.75 won from the previous session’s close.
Source: Yonhap News Agency