Stocks drop 1.5% as inflation concerns persist
Stocks fell over 1 percent for the second straight session Wednesday as foreign investors dumped local shares amid growing worries over inflation. The won fell against the dollar.
The benchmark Kospi dropped 47.77 points, or 1.49 percent, to close at 3,161.66 points.
Trading volume was high at about 1.4 billion shares worth some 22.2 trillion won ($19.83 billion), with losers outnumbering gainers 705 to 178.
Foreigners offloaded a net 2.7 trillion won – the highest amount since Feb. 26 – and institutions sold a net 250 billion won, while retail investors purchased a net 2.98 trillion won.
The local index got off to a weak start, tracking losses on Wall Street as spiking commodity prices fueled investor concerns of inflation and possibly earlier rate hikes.
Overnight, the U.S. Dow Jones Industrial Average slumped 1.36 percent, while the tech-heavy Nasdaq Composite fell 0.09 percent.
In Seoul, the Kospi fell by as much as 2.2 percent during the session on foreign selling before trimming earlier losses.
"Market players appear to be concerned whether rising inflation will be an ongoing trend," Kiwoom Securities' analyst Han Ji-young said.
Mirae Asset Securities analyst Seo Sang-young said foreign offloading of local stocks ahead of the stock options' expiration day Thursday further weighed on the market.
Samsung Electronics moved down 1.48 percent to 80,000 won, and chipmaker SK hynix declined 2.85 percent to 119,500 won
Internet portal Naver slipped 1.72 percent to 343,000 won, and its rival Kakao retreated 1.31 percent to 113,000 won.
Chemical maker LG Chem tumbled 5.27 percent to 863,000 won, and rechargeable battery maker Samsung SDI decreased 1.25 percent to 633,000 won.
Pharmaceutical firm Celltrion skid 2.96 percent to 262,500 won, while Samsung Biologics gained 4.77 percent to 856,000 won.
Carmaker Hyundai Motor rose 0.44 percent to 227,500 won, and its sister company Kia rose 2.09 percent to 83,100 won.
The Kosdaq lost 11.51 points, or 1.18 percent, to close at 967.10.
The local currency closed at 1,124.7 won to the dollar, up 5.1 won from the previous session's close.
Bond prices, which move inversely to yields, closed mixed. The yield on three-year government bonds lost 0.7 basis point to 1.121 percent, and the yield on the benchmark 10-year government bond added 1.5 basis points to 1.61 percent.
BY LEE TAE-HEE, YONHAP [firstname.lastname@example.org]