U.S. Federal Reserve keeps key rate steady, won rebounds against dollar

Home > Business > Finance

U.S. Federal Reserve keeps key rate steady, won rebounds against dollar

Published: 02 May. 2024, 17:35 Updated: 02 May. 2024, 18:01

A screen in Hana Bank's trading room in central Seoul shows the Kospi closing at 2,683.65 points on Thursday, down 0.31 percent, or 8.41 points, from the previous trading session. [NEWS1]

Stocks fell slightly Thursday following the U.S. Federal Reserve's decision to hold the key rate. The won rebounded against the dollar.

The Kospi lost 8.41 points, or 0.31 percent, to 2,683.65, ending the three-session streak that started last Friday.

Trade volume was slim at 342.7 million shares worth 8.9 trillion won ($6.5 billion). Decliners outnumbered gainers 513 to 357.

Individual and foreign investors bought a net 147.4 billion won in local shares, offsetting a net sale of 144.1 billion won from institutions.

"The Korean financial market was slightly weak due to a less-than-expected hawkish stance from the U.S. Federal Reserve," said Lee Jae-won, an analyst at Shinhan Securities.

Overnight, the U.S. central bank kept the rate unchanged for the sixth straight meeting as widely expected due to still high inflation. But the Fed showed a dovish stance, as Federal Reserve Chair Jerome Powell said it is "unlikely" for the Fed to hike interest rates at its next meeting.

In Seoul, major shares closed mixed.

Samsung Electronics rose 0.65 percent to 78,000 won, but SK hynix fell 0.34 percent to 173,600 won.

Posco Holdings declined 1.48 percent to 399,000 won, and Korea Zinc dropped 0.76 percent to 460,000 won.

Bank shares were negative as Hana Financial Group decreased 2.9 percent to 57,000 won, and KB Financial Group slid 4.37 percent to 72,300 won.

Defense companies finished higher on strong first-quarter performance, as Hanwha Aerospace advanced 4.26 percent to 220,500 won, and Korea Aerospace Industries (KAI) jumped 4.44 percent to 54,100 won.

HYBE dipped 0.99 percent to 200,000 won after releasing its weak first-quarter earnings report amid an internal power struggle.

The local currency closed at 1,375.9 won against the dollar, down 6.1 won from the previous session's close.

The Kosdaq lost 1.45 points, or 0.17 percent, to close at 867.48.

Bond prices, which move inversely to yields, closed higher. The yield on three-year government bonds fell 2.2 basis points to 3.508 percent, and the return on benchmark U.S. 10-year government bonds dropped 4.9 basis points to 4.635 percent.

BY CHOI HAE-JIN, YONHAP [choi.haejin@joongang.co.kr]