Stocks close lower after sharp dip on Wall Street

A screen in Hana Bank's trading room in central Seoul shows the Kospi closing at 2,687.45 points on Monday, down 7.60 points, or 0.28 percent, from the previous trading day. [YONHAP]

Stocks ended their two-day winning streak on Monday as investors' concerns grew over a sharp dip on Wall Street last week and the Fed's aggressive tightening. The won fell against the dollar.

The Kospi lost 7.6 points, or 0.28 percent, to close at 2,687.45 points.

Trading volume was moderate at about 860 million shares worth some 9 trillion won ($7.1 billion), with gainers outnumbering losers 426 to 413.

Institutions bought a net 490.0 billion won and foreigners purchased 14.0 billion won, while retail investors offloaded 485.5 billion won.

After a weak opening, stocks traded lower as investors brace for the Federal Open Market Committee (FOMC) meeting, the outcome of which is set to be announced Wednesday.

On Friday, the tech-heavy Nasdaq tumbled 4.17 percent on investors' fears about the tightening of U.S. monetary policies and the virus lockdown in China. The Dow Jones Industrial Average and the S&P 500 dipped 2.77 percent and 3.63 percent, respectively.

China expanded lockdowns amid a surge in Covid-19 cases, increasing concerns about difficulties in global supply chains.

"China's antivirus lockdown in Shanghai and the [U.S.] FOMC meeting results seem to have weighed on the Kospi's performance," Eugene Investment & Securities analyst Huh Jae-hwan said. "The slowing growth in exports and increasing trade deficit may have added to woes, but their impacts are limited," he added.

The Kospi recovered some of its earlier losses in the afternoon amid strong individual buying.

Techs and financials led the Kospi's retreat, while chemicals performed better.

Samsung Electronics lost 0.15 percent to 67,300 won, and LG Energy Solution retreated 2.04 percent to 408,500 won. SK hynix declined 1.78 percent to 110,500 won.

Internet portal operator Naver shed 1.92 percent to 281,000 won, and Samsung Biologics closed unchanged at 838,000 won.

The local currency ended at 1,265.10 won against the dollar, up 9.2 won from Friday's close.

The Kosdaq declined 2.93 points, or 0.32 percent, to close at 901.82 points.

Bond prices, which move inversely to yields, closed mixed. The yield on three-year government bonds gained 3.2 basis points to 2.958 percent, and the yield on the benchmark 10-year government bond fell 0.7 basis points to 2.82 percent.

BY CHO JUNG-WOO, YONHAP [cho.jungwoo1@joongang.co.kr]