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Seoul shares open lower on Fed uncertainties

Published: 04 May. 2023, 09:49 Updated: 04 May. 2023, 13:50

A screen in Hana Bank's trading room in central Seoul shows stock and foreign exchange markets open on Thursday. [NEWS1]

Stocks opened marginally lower Thursday after the U.S. Federal Reserve threw cold water on market expectations that the rate hike cycle is soon nearing an end, ruling out the possibility of a rate cut this year.

The Kospi slipped 3.42 points, or 0.14 percent, to 2,497.98 in the first 15 minutes of trading.

Fed Chair Jerome Powell said after its policy meeting that it's too soon to say the rate hike cycle is over as the Fed believes the inflation remains too high.

The U.S. central bank raised the interest rate by 0.25 percentage points to a range of 5 to 5.25 percent following its policy meeting Wednesday, the 10th consecutive hike since March 2022.

Although the Fed statement showed a change in language to the effect that lowers the chances for further rate increases in the future, Powell at the press conference made it clear the Fed will maintain the restrictive policy if necessary as it examines the market impact.

In Seoul, auto and IT companies fell.

Samsung Electronics lost 0.3 percent.

Hyundai Motor was down 0.9 percent, and its auto components-making arm Hyundai Mobis slipped 0.7 percent.

Internet portal provider Naver fell 1 percent.

Battery sectors trended higher. LG Energy Solution gained 0.4 percent, and Samsung SDI rose 0.6 percent.

The local currency was trading at 1,330 won against the dollar at around 9:15 a.m., down 8.2 won from Wednesday's close.

Yonhap