Shares nosedive amid concerns over growing inflation

A screen in Hana Bank's trading room in central Seoul shows the Kospi closing at 2,626.34 points on Tuesday, down 44.31 points, or 1.66 percent, from the previous trading day. [NEWS1]

Shares nosedived by over 1.5 percent Tuesday amid concerns about fast-growing inflation pressure that may strengthen monetary tightening in the United States and other major economies. The won steeply fell against the dollar.

The Kospi fell 44.31 points, or 1.66 percent, to close at 2,626.34 points.

Trading volume was moderate at about 517 million shares worth some 8.8 trillion won ($7 billion), with losers outnumbering gainers 730 to 163.

Institutional investors unloaded a net 822.5 billion won worth of stocks, with foreigners also selling off a net 209.3 billion won. Individual investors bought a net 992.4 billion won.

Investors remained wary of the U.S. Fed's hawkish stance, which has triggered a sharp rise in U.S. Treasury fields.

"The estimate-beating U.S. job data for May and other factors added to the possibilities of aggressive monetary tightening by the Fed, putting more upward pressure on the dollar. The volatility in the FX market increased sell-offs in the futures market," said Shinhan Investment researcher Choi Yoo-joon.

Most stocks finished lower in Seoul.

Samsung Electronics lost 1.95 percent to 65,500 won, and LG Chem shed 4.96 percent to 556,000 won.

Celltrion lost 1.55 percent to 159,000 won.

Hyundai Motor dropped 1.87 percent to 183,500 won, and SK hynix declined 2.8 percent to 104,000 won.

Internet portal Naver retreated 3.3 percent to 278,000 won, and Kakao lost 4.43 percent to 81,900 won.

Among gainers, gaming firm Krafton jumped 6.13 percent to 268,500 won, with battery maker SK Innovation adding 4.88 percent to 236,500 won.

The local currency closed at 1,257.7 won against the dollar, up 15 won from the previous session's close, the sharpest increase in almost 13 months, as demand for risky assets waned.

The Kosdaq dropped 17.73 points, or 1.99 percent, to close at 873.78 points.

Bond prices, which move inversely to yields, closed lower. The yield on three-year government bonds gained 11.1 basis points to 3.231 percent, and the yield on the benchmark 10-year government bond gained 10.9 basis points to 3.04 percent.

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