Stocks fall as investors take to sidelines ahead of expected rate hike

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Stocks fall as investors take to sidelines ahead of expected rate hike

A screen in Hana Bank's trading room in central Seoul shows the Kospi closing at 2,347.21 points on Wednesday, down 20.64 points, or 0.87 percent, from the previous trading day. [YONHAP]

A screen in Hana Bank's trading room in central Seoul shows the Kospi closing at 2,347.21 points on Wednesday, down 20.64 points, or 0.87 percent, from the previous trading day. [YONHAP]

 
Stocks slipped back into negative territory again Wednesday, as investors took to the sidelines ahead of a widely expected sharp rate hike by the Federal Reserve.
 
The benchmark Kospi lost 20.64 points, or 0.87 percent, to close at 2,347.21.
 
Trading volume was light at 367.1 million shares worth 6.2 trillion won ($4.4 billion), with losers outpacing gainers 580 to 279.
 
"Today's losses came as investors refrained from buying risky assets as they keep an eye on the results of the Fed's policy meeting," analyst Han Ji-young from Kiwoom Securities said.
 
The stock market could tumble sharply if the Fed delivers a higher-than-expected rate forecast through the end of 2025. The Fed is scheduled to announce its rate decision on Wednesday, U.S. time.
 
"This year and next year's top-line figures will be important. A figure over 4.5 could send shock waves into the local stock market," analyst Kim Dae-jun of Korea Investment & Securities said.
 
Foreign investors offloaded a net 273.2 billion won worth of stocks, while institutional investors sold off a net 66.0 billion won worth of shares. Retail investors scooped up a net 325.6 billion won.
 
In Seoul, shares mostly traded lower across the board.
 
Samsung Electronics lost 0.9 percent to 55,300 won, while SK hynix stayed flat at 88,000 won.
 
Battery maker LG Energy Solution slid 0.83 percent to 479,000 won and Samsung SDI dipped 2.37 percent to 619,000 won at the closing bell.
 
Naver declined 2.29 percent to 213,000 won, and Kakao lost 1.99 percent to 64,000 won.
 
Daewoo Shipbuilding & Marine Engineering jumped 8.93 percent to 21,350 won amid heightened anticipation that the company's privatization would gather steam down the road.
 
The local currency ended at 1,394.2 won against the dollar, up 4.7 won from Tuesday's close.
 
The Kosdaq lost 5.46 points, or 0.72 percent, to close at 754.89 points.
 
Bond prices, which move inversely to yields, closed lower. The yield on three-year government bonds advanced 7.1 basis points to 3.860 percent, and the yield on the 10-year government bond gained 8.3 basis points to 3.903 percent.

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