Seoul stocks snap 5-day winning streak on renewed rate hike fears; won down sharpest in 1 month

SEOUL, Seoul stocks dipped by more than 1 percent to snap their five-day winning streak Wednesday on renewed rate hike fears. The Korean won fell by the most in one month against the U.S. dollar.

The benchmark Korea Composite Stock Price Index (KOSPI) lost 31.44 points, or 1.28 percent, to finish at 2,431.91. Trading volume was moderate at 413.6 million shares worth 9.5 trillion won (US$7.2 billion), with decliners outnumbering gainers 697 to 195.

The index opened sharply lower and remained in negative territory throughout the session, as investor sentiment was dampened after Federal Reserve Chair Jerome Powell delivered hawkish comments on the central bank's next policy direction Tuesday (U.S. local time).

Foreign and institutional investors sold off a combined 974.1 billion won, while retail investors purchased a net 942.2 billion won.

"The KOSPI fell as Powell's hawkish comments prodded investors to lock in recent gains," analyst Lee Kyoung-min from Daishin Securities said.

Investors are gearing up for the release of key U.S. job data later this week, to see if it could offer any clues on the Fed's future monetary policy direction.

Powell's comments, along with data pointing to strong fundamentals of the U.S. economy, is stoking projection that the Fed may deliver another 50-basis point rate increase, sharper than a 25-basis point hike that market players had expected, to tame inflation.

In Seoul, large cap shares closed lower across the board with tech heavyweights stung hard.

Market bellwether Samsung Electronics declined 0.66 percent to 60,300 won and smaller rival SK hynix dipped 2.36 percent to 86,800 won.

K-pop agency Hybe fell 5.99 percent to 177,200 won, amid the ongoing proxy battle with SM Entertainment.

Auto shares ended mixed. Top carmaker Hyundai Motor was down 0.11 percent to 174,900 won, while sister affiliate Kia advanced 1.68 percent to 78,900 won.

Shares in home appliance maker LG Electronics closed higher, rising 2.71 percent to 117,500 won on anticipations the company will make a turnaround in the first quarter.

The local currency closed at 1,321.4 won against the U.S. dollar, down 22 won from the previous session's close, the sharpest fall since Feb. 6.

Bond prices, which move inversely to yields, closed sharply lower. The yield on three-year Treasurys advanced 12.9 basis points to 3.855 percent, and the return on the benchmark five-year government bonds was up 10.3 basis points to 3.822 percent.

Source: Yonhap News Agency

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