Stocks fall for a second day as Fed befuddles investors

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Stocks fall for a second day as Fed befuddles investors

Published: 09 Mar. 2023, 17:02 Updated: 09 Mar. 2023, 19:01

A screen in Hana Bank's trading room in central Seoul shows the Kospi closing at 2419.09 points on Thursday, down 12.82 points, or 0.53 percent, from the previous trading day. [NEWS1]

Stocks closed lower for a second straight session Thursday on heavy sell-offs by foreign investors and renewed fears the Federal Reserve will accelerate its pace of rate increases. The local currency fell against the dollar.

The benchmark Kospi closed down 12.82 points, or 0.53 percent, to 2,419.09. Trading volume was moderate at 465.3 million shares worth 10.2 trillion ($7.7 billion), with decliners outnumbering gainers 478 to 396.

The market got off to a strong start at the opening bell, but pared earlier gains as the foreign investor selling spree continued.

Foreign investors sold a net 972 billion won, while retail and institutional investors purchased a combined 940.5 billion won.

Investors are trying to assess the latest comments from Federal Reserve Chair Jerome Powell on the central bank's policy direction.

Powell on Wednesday said no decisions have been made on the pace of the Fed's rate hikes after delivering hawkish comments on future monetary tightening a day earlier.

But he stressed that the Fed is ready to speed up its tightening pace should data support further rate hikes.

"The Kospi came under heavy selling pressure as foreign investors tried to locked in profits in battery shares, which have surged in past trading," Daishin Securities analyst Lee Kyoung-min said.

Market heavyweights closed lower across the board.

Samsung Electronics inched down 0.33 percent to 60,100 won, and SK hynix declined 1.38 percent 85,600 won.

LG Energy Solution, an EV battery maker, shed 2.31 percent to close at 549,000 won, and Samsung SDI fell 2.92 percent to end at 732,000 won.

Among gainers, Hyundai Motor advanced 0.8 percent to 176,300 won, and Celltrion gained 1.88 percent to 157,200 won, while car parts maker Hyundai Mobis was up 2.09 percent to 220,000 won.

The local currency closed at 1,322.2 won against the dollar, up 0.8 won from the previous session's close.

Bond prices, which move inversely to yields, closed lower. The yield on three-year government bonds rose 0.6 basis points to 3.863 percent, and the yield on the benchmark 10-year government bonds climbed 2.3 basis points to 3.990 percent.

BY SOHN DONG-JOO, YONHAP [sohn.dongjoo@joongang.co.kr]