Stocks snap winning streak amid concerns over inflation

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Stocks snap winning streak amid concerns over inflation

Published: 03 Apr. 2023, 17:40

A screen in Hana Bank's trading room in central Seoul shows the Kospi closing at 2,472.34 points on Monday, down 0.18 percent, or 4.52 points, from the previous trading day. [YONHAP]

Stocks ended lower to snap their four-day winning streak Monday as Saudi Arabia and other OPEC+ members' announcement of surprise output cuts are raising renewed concerns over inflation. The won sharply fell against the dollar.

The Kospi fell 4.52 points, or 0.18 percent, to close at 2,472.34. Trading volume was moderate at 801.73 million shares worth 11.16 trillion won ($8.5 billion), with gainers outpacing decliners 510 to 370.

The oil producers' output cuts come just after data showed that U.S. inflation may slow down at some point.

The personal consumption expenditure (PCE) price index, an inflation gauge closely watched by the Federal Reserve, rose at a slower-than-expected rate of 0.3 percent in February.

On Friday, the Dow Jones Industrial Average rose 1.3 percent, and the tech-heavy Nasdaq Composite jumped 1.7 percent amid hopes that the Fed may slow down its monetary tightening after the PCE data showed signs of easing.

"Oil prices surged after oil producers announced surprise cuts, fueling worries over inflation. Foreigners and institutions expanded their net selling, weighing on the Kospi index," Park Hee-cheol, an analyst at Mirae Asset Securities, said.

Foreigners and institutions sold a combined 495 billion won, exceeding individuals' stock purchases valued at 479 billion won.

In Seoul, tech, auto and airline stocks were lead decliners.

Samsung Electronics fell 1.4 percent to 63,100 won, and chipmaker SK hynix declined 1.6 percent to 87,200 won

Hyundai Motor dropped 0.5 percent to 183,600 won, and national flag carrier Korean Air shed 0.2 percent to 23,150 won.

Among gainers, leading refiner SK Innovation rose 0.4 percent to 180,000 won, S-Oil climbed 2.6 percent to 82,200 won, and Posco Holdings gained 6.5 percent to 392,000 won.

The local currency ended at 1,316.5 won against the dollar, up 14.6 won from the previous session's close.

Bond prices, which move inversely to yields, closed mixed. The yield on three-year government bonds rose 8.4 basis points to 3.348 percent, and the yield on the benchmark 10-year government bonds shed 8.1 basis points to 3.470 percent.

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