Kospi stocks dip almost 1% on concerns over Fed's hawkish remarks

A screen in Hana Bank's trading room in central Seoul shows the Kospi closing at 2,584.18 points on Wednesday, down 0.98 percent, or 25.45 points, from the previous trading session. [NEWS1]

Stocks dipped nearly 1 percent Wednesday to expand their losing streak to a fourth day as investors' concerns heightened on hawkish remarks by U.S. Federal Reserve officials and escalating tensions in the Middle East. The won rose against the dollar.

The Kospi plunged 25.45 points, or 0.98 percent, to close at 2,584.18.

Trade volume was a little slim at 400.5 million shares worth 9.5 trillion won ($6.8 billion), with decliners outpacing gainers 456 to 406.

Foreigners and institutions unloaded local shares worth 179.6 billion won and 200.98 billion won, respectively, while retail investors bought 360.8 billion won worth of stocks.

Overnight, the S&P 500 fell 0.2 percent and the tech-heavy Nasdaq edged down 0.1 percent, while the Dow Jones Industrial Average gained 0.2 percent.

U.S. Federal Reserve chair Jerome Powell said in a forum in Washington that a series of recent inflation reports indicates it is likely to take longer than expected for the central bank to have confidence to start cutting its rates.

"Volatility increased in the stock market as hopes for early rate cuts were shattered on Powell's hawkish remarks following the release of hotter-than-expected March inflation reports," Lee Kyoung-min, an analyst at Daishin Securities, said.

In Seoul, most big-cap stocks went south.

Samsung Electronics dropped 1.37 percent to 78,900 won, and SK hynix decreased 0.22 percent to 178,700 won.

LG Energy Solution lost 0.41 percent to 364,500 won, Samsung SDI edged down 0.13 percent to 386,000 won, and Posco Future M plummeted 3.11 percent to 249,000 won.

Posco Holdings and LG Chem also shed 2.5 percent and 1.7 percent to 371,000 won and 375,500 won, respectively.

Auto shares also sharply lost ground, with Hyundai Motor down 3.51 percent to 233,500 won and Kia down 1.39 percent to 113,100 won.

Samsung C&T shot down 3.94 percent to 138,800 won.

IT shares were among the few gainers, with Naver up 0.06 percent to 179,600 won and Kakao up 0.32 percent to 46,900 won.

Hanwha Aerospace soared 4.27 percent to 220,000 won.

The local currency ended at 1,386.80 won against the greenback, down 7.7 won from the previous session's close, ending its slide after seven consecutive trading days.

The Kosdaq gained 0.22 points, or 0.03 percent, to close at 833.03.

Bond prices, which move inversely to yields, closed lower. The yield on three-year government bonds rose 1.5 basis points to 3.483 percent, and the return on benchmark U.S. 10-year government bonds climbed 6.5 basis points to 4.669 percent.

BY KIM JI-YE, YONHAP [kim.jiye@joongang.co.kr]