Seoul stocks pull back amid fears of a US rate hike

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South Korean stocks retreated on Monday, weighed down by concerns over the possibility of a faster-than-expected US Federal Reserve cut and rate hike. The Korean won appreciated against the US dollar.

Korea’s benchmark stock price index (Kospi) fell 28.17 points, or 0.95%, to close at 2,926.72 points.

Trading volume moderated to around 470 million shares worth some 10,200 billion won ($ 8.5 billion), with the losers outnumbering the winners 615 to 259.

Institutions sold 500 billion won net, and foreign investors unloaded 82 billion won, while retail investors bought 573 billion won.

The Kospi cut came as the Fed announced it would complete its cut and start rate hikes as early as March in the recently released minutes of its December meeting.

On Friday (US time), the Nasdaq Composite fell 0.96% and the Dow Jones Industrial Average slipped 0.01% amid concerns about the rate hike.

Investors await the Federal Reserve Chairman’s hearing in the Senate on Tuesday, looking for clues to the US central bank’s stance on rate hikes.

“Investors are concerned that Powell will make hawkish comments about inflation at the hearing,” said Jeong Myung-ji, analyst at Samsung Securities.

Most large caps closed lower in Seoul.

Market kingpin Samsung Electronics lost 0.38% to 78,000 won, and No.2 chipmaker SK hynix lost 1.97% to 124,500 won.

Internet portal giant Naver fell 0.89% to 335,000 won, with rival Kakao slumping 3.4% to 96,600 won.

Pharmaceutical giant Samsung Biologics lost 0.95% to 836,000 won, and major automaker Hyundai Motor lost 2.56% to 209,500 won.

The local currency closed at 1,199.1 won to the US dollar, up 2.4 won from the close of the previous session.

Bond prices, which move inversely to yields, closed lower. The three-year Treasury bill yield rose 4.3 basis points to 2.058%, and the benchmark five-year government bond yield rose 0.5 basis points to 2.260%. (Yonhap)

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