Stocks finish down as China's economic growth slows in May

Home > Business > Finance

Stocks finish down as China's economic growth slows in May

Published: 15 Jun. 2023, 16:41

Screens in Hana Bank's trading room in central Seoul show the Kospi closing at 2,608.54 points on Thursday, down 0.40 percent, or 10.54 points, from the previous trading session. [YONHAP]

Stocks finished lower Thursday on the news that China's economy slowed in May, falling short of market expectations in both industrial output and retail sales growth. The won lost ground against the dollar.

The Kospi slid 10.54 points, or 0.4 percent, to 2,608.54. Trading volume was moderate at 571.7 million shares worth 11.3 trillion won ($8.82 billion), with decliners outnumbering gainers 627 to 243.

"The revised rate outlook further weakens the expectation for an early rate cut by the Fed. After the FOMC [Federal Open Market Committee] in May, market watchers are increasingly leaning toward the view that chances of seeing a rate cut this year are slim," Kim Young-hwan, an analyst at NH Investment & Securities, said.

The Fed held interest rates steady in the range of 5 percent to 5.25 percent in its policy meeting Wednesday, the first such pause in the series of rate hikes that continued for the past 15 months to tame runaway inflation.

Yet the U.S. central bank signaled more rate hikes to come by the end of this year, as monetary tightening needs to be maintained, citing the persistent inflation and a stronger-than-expected economy.

The projection for the interest rates was revised up to a 5.50 percent to 5.75 percent range, meaning the Fed could raise it by another half a percentage point.

In Seoul, large-cap bio and steel stocks led the decline.

Samsung Biologics fell 0.77 percent to 778,000 won, and Posco Holdings lost 1.4 percent to 386,000 won.

Samsung Electronics shed 0.56 percent to 71,500 won, while SK hynix rose 0.17 percent to 119,000 won.

LG Chem grew 0.42 percent to 722,000 won, and Naver climbed 0.65 percent to 200,500 won.

Hybe, the entertainment agency behind BTS, jumped 2.91 percent to 300,500 won.

The local currency ended at 1,280.50 won against the dollar, up 2 won from Wednesday's close.

Bond prices, which move inversely to yields, closed mixed. The yield on three-year government bonds advanced 7.9 basis points to 3.626 percent, and the yield on benchmark 10-year government bonds retreated 3.6 basis points to 3.790 percent.

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