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Kospi falls as hopes for Fed rate cuts fade

Published: 17 May. 2024, 17:58

KIM JU-YEON
[email protected]

A screen in Hana Bank's trading room in central Seoul shows the Kospi closing at 2,724.62 points on Friday, down 1.03 percent, or 28.38 points, from the previous trading session.[YONHAP]

Shares slumped more than 1 percent Friday as investors locked in profits from a recent rally caused by hope for a rate cut from the U.S. Federal Reserve. The won fell in value against the dollar.

The Kospi fell 28.38 points, or 1.03 percent, to 2,724.62, snapping a two-session winning streak. It rose 0.83 percent the previous day.

Trade volume was moderate at 561.1 million shares worth 10.3 trillion won ($7.6 billion), with losers beating winners 574 to 305.

Foreign investors and institutions dumped a net 597.5 billion won and 149.3 billion won worth of local shares, respectively, while individuals purchased a net 720.3 billion won.

On Wall Street, major stock indexes closed lower Thursday after touching record highs the previous day on government data showing a moderation in consumer prices.

The Dow Jones Industrial Average fell 0.1 percent, and the Nasdaq composite lost 0.26 percent.

“The drop in U.S. stocks weighed heavily on foreign investors here,” said Shinhan Securities analyst Lee Jae-won.

Investors still fear a delay to the Fed's rate cuts despite moderating inflation, market watchers said.

In Seoul, most shares finished lower across the board.

Samsung Electronics sank 1.02 percent to 77,400 won and SK hynix dropped 1.61 percent to 189,900 won.

Hyundai Motor retreated 1.21 percent to 244,000 won, and Kia fell 1.74 percent to 112,700 won.

Bank shares also went south as Shinhan Financial Group slid 0.93 percent to 47,700 won and Hana Financial Group fell 0.79 percent to 63,100 won.

Naver dropped 0.64 percent to 187,300 won, and Kakao decreased 0.75 percent to 46,450 won.

But CJ Cheiljedang, an F&B unit under CJ Group, gained 1.37 percent to reach 333,500 won, and Dongwon F&B jumped 6.33 percent to 39,500 won on larger-than-expected first quarter earnings due to strong demand for Korean food products.

The local currency ended at 1,354.9 won against the dollar, up 9.9 won from the previous session's close of 1,345 won, which was its highest since March 28.

Bond prices, which move inversely to yields, closed lower. The yield on three-year government bonds rose 1 basis points to 3.384 percent, and the return on the benchmark U.S. 10-year government bonds gained 3.7 basis points to 4.377 percent.

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