Seoul stocks dive to fresh 19-month low amid woes over Fed's rate decision

A currency trader walks near screens showing the KOSPI, left, and the foreign exchange rate between the U.S. dollar and South Korean won at a foreign exchange dealing room in Seoul, June 15. Yonhap

Korean stocks sank to a fresh 19-month low Wednesday, extending their losing streak for a seventh day ahead of the U.S. Federal Reserve's interest rate decision amid high inflation and concerns over a global recession. The local currency also fell against the U.S. dollar.

The KOSPI lost 45.59 points, or 1.83 percent, to close at 2,447.38, its lowest since Nov. 10, 2020, when the index closed at 2,452.83.

Trading volume was moderate at 700.92 million shares worth 9.80 trillion won ($7.59 billion), with decliners far outpacing gainers 812 to 86.

The market opened a tad lower after Wall Street ended mixed but had extended losses on heavy foreign sell-offs.

Foreign investors sold a net 454.42 billion won worth of shares, while individuals and institutions bought a net 346.28 billion won and 73.6 billion won, respectively.

Investors remained wary of the result of the Federal Reserve's two-day interest rate-setting meeting set to end Wednesday (local time) amid the prospect that the U.S. central bank could raise its key rate by 75 basis points to tame surging inflation.

If the Fed does this, it would be the first time since 1994 that it has raised the rate by three-quarters of a percentage point at a time, a move expected to accentuate its concerns over runaway inflation.

"Investors want to check what path the Fed will take on monetary policy down the road amid deepening concerns over a global economic downturn and if it is willing to take responsibility for high inflation," Lee Woong-chan, an analyst at Hi Investment & Securities, said.

In Seoul, most big-cap shares traded lower, with tech shares leading the fall.

Market bellwether Samsung Electronics fell 1.94 percent to 60,700 won, and No. 2 chipmaker SK hynix lost 1.21 percent to 97,900 won.

Major battery maker LG Energy Solution tumbled 1.52 percent to 420,000 won, and LG Chem dropped 0.53 percent to 561,000 won.

Top steelmaker POSCO decreased 0.76 percent to 261,500 won, and Samsung SDI shed 0.56 percent to 528,000 won.

Internet portal giant Naver sank 3.36 percent to 244,500 won, and platform operator Kakao dived 5.09 percent to 72,700 won.

Among decliners, K-pop powerhouse Hybe dived 24.87 percent to 145,000 won, after BTS announced an unexpected decision to suspend group projects.

But carmakers gathered ground, as unionized truckers ended their weeklong strike Tuesday following an agreement with the government upon their continued push for a freight rate system that guarantees basic wages for truck drivers amid surging fuel prices.

Hyundai Motor rose 1.46 percent to 174,000 won, and its smaller affiliate Kia inched up 0.13 percent to 78,100 won.

Banks and insurers also finished higher on envisioned high interest rates.

Internet-only Kakao Bank gained 1.27 percent to 35,800 won, and top life insurer Samsung Life Insurance jumped 2.51 percent to 65,400 won.

The local currency ended at 1,290.5 won against the U.S. dollar, down 4.1 won from the previous session's close. (Yonhap)

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