Stocks close slightly higher amid U.S. debt ceiling woes

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Stocks close slightly higher amid U.S. debt ceiling woes

Published: 15 May. 2023, 17:08

A screen in Hana Bank's trading room in central Seoul shows the Kospi closing at 2,479.35 points on Monday, up 0.16 percent, or 3.93 points, from the previous trading day. [YONHAP]

Stocks snapped a four-day losing streak to close marginally higher Monday, amid concerns over the dispute related to the U.S. debt ceiling between the U.S. government and Congress. The won fell against the dollar.

The Kospi finished up 3.93 points, or 0.16 percent, to 2,479.35, after swerving in and out of negative terrain. Trading volume was light at 475.7 million shares worth 6.8 trillion won ($5.08 billion), with decliners outnumbering gainers 549 to 315.

"The political deadlock over the debt ceiling issue has fueled concerns over a potential default, dampening consumer sentiment," Han Ji-young, an analyst at Kiwoom Securities, said.

"But it's quite appropriate to forecast 'a last-minute settlement,' given the pattern of past debt ceiling negotiations," Han said.

The Joe Biden administration and a divided Congress have yet to reach an agreement over raising the U.S. government's $31.4 trillion borrowing limit, with the Congressional Budget Office warning Friday of significant risks of defaulting on payments in June if the debt ceiling is not raised.

U.S. consumer sentiment slumped to a six-month low in May, adding to concerns the economy is falling into recession.

In Seoul, market bellwether Samsung Electronics gained 0.62 percent to 64,500 won, and chipmaker SK hynix lost 0.92 percent to 86,400 won.

Steelmaker Posco Holdings advanced 1.24 percent to 368,000 won, and Posco Future M climbed 1 percent to 303,500 won.

Battery maker LG Energy Solution slid 0.37 percent to 545,000 won, and Samsung SDI moved up 1.35 percent to 674,000 won.

Hyundai Motor pared earlier gains to close down 0.24 percent to 208,000 won.

Korea Electric Power Corporation fell 2.13 percent to 19,280 won after the government said earlier in the day it will raise electricity rates and gas prices by 5.3 percent amid mounting losses.

The local currency ended at 1,337.00 won against the dollar, up 2.5 won from Friday's close.

Bond prices, which move inversely to yields, closed lower. The yield on three-year government bonds rose 5.6 basis points to 3.280 percent, and the yield on the benchmark 10-year government bonds jumped 7.6 basis points to 3.446 percent.

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