South Korean stocks extended their losing streak to a fourth consecutive session on Tuesday, as inflation woes at home and in the United States loomed heavily over the financial markets. The Korean won rose against the U.S. dollar.
The benchmark Korea Composite Stock Price Index (KOSPI) declined 25.86 points, or 0.89 percent, to close at 2,864.24 points.
Trading volume was moderate at about 545 million shares worth some 9.9 trillion won (US$8.3 billion), with losers outnumbering gainers 726 to 171.
Institutions sold a net 227 billion won, while foreigners bought 7 billion won and retail investors purchased 208 billion won.
The market came off to a lackluster start amid continued jitters over the U.S. Federal Reserve’s faster-than-anticipated tapering and rate hikes to tame inflation. Such concerns led to a steep increase in the 10-year Treasury yields in the U.S.
The Bank of Korea’s rate hike last week also weighed on investor sentiment.
The IPO subscription event for LG Energy Solution Ltd., a two-day event that ends Wednesday, also drove investors to cash in on overvalued stocks to join the process. The firm’s listing is set for Jan. 27.
“The yields of the U.S. bond futures steeply increased in over-the-counter trading, which seems to have pressured the local stocks,” Mirae Asset Securities analyst Park Gwang-nam said.
The analyst also cited as another reason for the market decline the selling ahead of LG Energy Solution’s planned IPO.
Most large caps closed lower.
Market bellwether Samsung Electronics lost 0.65 percent to 77,000 won, and No. 2 chipmaker SK hynix decreased 0.39 percent to 126,500 won.
Internet portal operator Naver retreated 1.6 percent to 338,000 won, leading chemical firm LG Chem fell 1.84 percent to 694,000 won, and pharmaceutical giant Samsung Biologics shed 2.42 percent to 806,000 won.
Among gainers, battery maker Samsung SDI jumped 5.3 percent to 675,000 won, and SK Innovation advanced 2.64 percent to 272,000 won.
The local currency closed at 1,190.1 won against the U.S. dollar, up 2.6 won from the previous session’s close.
Bond prices, which move inversely to yields, closed higher. The yield on three-year Treasurys lost 2.1 basis points to 2.127 percent, and the return on the benchmark five-year government bond fell 1.8 basis points to 2.333 percent.
Source: Yonhap News Agency