Stocks fall for second day over fears of global recession

A screen in Hana Bank's trading room in central Seoul shows the Kospi closing at 2,332.31 points on Thursday, down 14.90 points, or 0.63 percent, from the previous trading day. [YONHAP]

Stocks closed down on Thursday, as investors were spooked by growing worries over a global economic recession following the U.S. Federal Reserve's sharp rate hike decision.

The benchmark Kospi lost 14.9 points, or 0.63 percent, and closed at 2,332.31.

Trading volume was light at 436.1 million shares worth 7.3 trillion won ($5.2 billion), with decliners outnumbering gainers 579 to 299.

Thursday's losses came after the Fed's overnight decision to raise its benchmark federal funds rate by 75 basis points for a third straight time, with its Chair Jerome Powell confirming his resolution to fight inflation "until the job is done."

"A strong tightening stance from the FOMC meeting coupled with the Fed's pessimistic outlook on the economy had some impact on the main bourse today," analyst Lee Kyoung-min from Daeshin Securities said.

"We forecast the Kospi could drop to the 2,000 mark as early as the end of this year. A declining trend is expected to continue on until the first half of next year."

Foreign investors sold a net 61.2 billion won worth of stocks and institutional investors a net 283.0 billion won, while retail investors scooped up a net 31.37 billion won.

In Seoul, most stocks ended lower, led by losses in semiconductors and other tech issues.

Samsung Electronics lost 1.63 percent and closed at a two-year low of 54,400 won.

SK hynix plunged 2.27 percent to 86,000 won.

Naver shed 3.05 percent to 206,500 won, and Kakao dived 4.22 percent to 61,300 won.

Bio shares were mixed. Samsung Biologics inched down 0.13 percent to 785,000 won, while Celltrion stayed unchanged at 169,000 won.

The local currency ended at 1,409.7 won against the dollar, up 15.5 won from the Wednesday session's close.

The Kosdaq lost 3.48 points, or 0.46 percent, to close at 751.41 points.

Bond prices, which move inversely to yields, closed lower. The yield on three-year government bonds advanced 20.3 basis points to 4.063 percent, and the yield on the 10-year government bond gained 8.4 basis points to 3.987 percent.

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