Stocks decline 0.88% on rate jitters and Ukraine worries
Stocks ended lower Wednesday, as the U.S. Fed's more hawkish stance on rates sparked worries about a global economic slowdown amid uncertainties related to Ukraine and China. The won fell against the dollar.
The benchmark Kospi lost 24.17 points, or 0.88 percent, to close at 2,735.03 points.
Trading volume was moderate at around 1.29 billion shares worth some 10.85 trillion won ($8.90 billion), with losers outnumbering gainers 584 to 275.
Foreigners and institutions sold stocks worth 584.9 billion won and 565.1 billion won, respectively, while retail investors picked up shares worth 1.1 trillion won.
The market opened lower, tracking losses on Wall Street, and extended losses, as U.S. Federal Reserve Gov. Lael Brainard warned of stronger actions regarding rate hikes to curb inflation.
Later in the day, the Fed plans to release the minutes from its March meeting, during which it raised interest rates for the first time since 2018.
"The hawkish comments from one of the Fed's dovish policymakers suggest a more aggressive policy path forward, which stoke fears of the economic slowdown. The market could experience high volatility for the time being," Kiwoom Securities analyst Han Ji-young said.
Uncertainties surrounding the Ukraine crisis continued, as the European Union on Tuesday discussed additional sanctions against Russia.
Adding to woes are potential disruptions of global supply chains, as China extended a lockdown in Shanghai amid soaring virus cases. The restrictions were imposed March 28 and supposed to be lifted Tuesday.
Samsung Electronics fell 1.01 percent to a 16-month low of 68,500 won, and chipmaker SK hynix sank 3.00 percent to 113,000 won.
Battery maker LG Energy Solution lost 1.00 percent to 444,500 won, and Samsung SDI shed 0.33 percent to 598,000 won.
The local currency closed at 1,218.30 won against the dollar, up 5.6 won from the previous session's close.
The Kosdaq dropped 9.34 points, or 0.98 percent, to close at 943.13 points.
Bond prices, which move inversely to yields, closed lower. The yield on three-year government bonds gained 6.4 basis points to 2.941 percent, and the yield on the benchmark 10-year government bond advanced 15.0 basis points to 2.55 percent.
BY SHIN HA-NEE, YONHAP [firstname.lastname@example.org]