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Stocks close lower as Fed rate decision nears

Published: 30 Jan. 2024, 17:00

KIM JU-YEON
[email protected]

Screens in Hana Bank's trading room in central Seoul show the Kospi closing at 2,498.81 points on Tuesday, down 0.07 percent, or 1.84 points, from the previous trading session. [NEWS1]

Shares closed lower Tuesday as investors booked profits ahead of the U.S. Federal Reserve's policy meeting later this week. The won rose in value against the dollar.

The Kospi shed 1.84 points, or 0.07 percent, to close at 2,498.81, ending its three consecutive session advance.

Trade volume was moderate at 476.1 million shares worth 8.63 trillion won ($6.49 billion). Winners, however, outpaced losers 493 to 385.

Foreign and retail investors sold a combined 197 billion won worth of stocks, offsetting institutions' stock purchases valued at 191 billion won during the session.

The Kospi traded mostly higher throughout the session, tracking overnight gains on Wall Street, but fell to negative terrain near the end of the session.

Overnight, U.S. stocks gained ground as investors looked ahead to scheduled earnings announcements by major companies and the Federal Reserve's rate decision meeting later this week.

The S&P 500 climbed 0.8 percent to close at a fresh high, while the Dow Jones Industrial Average and the Nasdaq composite rose 0.6 percent and 1.1 percent, respectively.

"Investor sentiment is expected to lean toward a wait-and-see mode ahead of this week's U.S. Federal Open Market Committee meeting," said Kim Seok-hwan, an analyst at Mirae Asset Securities.

In Seoul, blue chips closed mixed across the board, with auto shares taking big losses. Hyundai Motor fell 2.86 percent to 190,000 won and Kia lost 1.90 percent to end at 98,000 won.

Energy-related shares also lost ground, with refiner SK Innovation dropping 2.91 percent to 116,800 won and the state-run Korea Electric Power Corporation losing 1.61 percent to close at 19,600 won.

Financial and steel shares, however, advanced, with KB Financial rising 0.54 percent to 55,900 won and steelmaker Posco Holdings adding 1.30 percent to close at 428,500 won.

The local currency ended at 1,329.40 won against the dollar, down 6.30 won from the previous session's close.

Bond prices, which move inversely to yields, closed higher. The yield on three-year government bonds fell 3.7 points to 3.267 percent, and the return on the benchmark U.S. 10-year government bonds dropped 6.4 points to 4.077 percent.

BY KIM JU-YEON, YONHAP [[email protected]]