Kospi sinks 1.26% on fears of rate cut delay by Fed

A screen in Hana Bank's trading room in central Seoul shows the Kospi closing at 2,687.60 points on Friday, down 1.26 percent, or 34.21 points, from the previous trading session. [NEWS1]

Shares closed lower for the fourth consecutive day Friday on deepening concerns over a possible delay in a rate cut by the U.S. Federal Reserve. The local currency fell in value against the dollar.

The Kospi shed 34.21 points, or 1.26 percent, to close at 2,687.60.

Trade volume was moderate at 491.3 million shares worth 12.01 trillion won ($8.8 billion), with losers sharply outnumbering winners 618 to 263.

Foreigners and institutions dumped local shares worth 377.4 billion won and 853.3 billion won, respectively, while individual investors went bargain hunting, buying 1.2 trillion won worth of stocks.

Overnight, the S&P 500 fell 0.7 percent, the Dow Jones Industrial Average slid 1.5 percent, and the tech-heavy Nasdaq Composite went down 0.4 percent as hotter-than-expected economic reports raised speculation the Fed could keep its rate high for longer.

Lee Jae-won, an analyst at Shinhan Securities, said hawkish comments by Fed officials in the latest monetary policy meeting minutes and stronger U.S. economic reports deepened concerns over interest rates, noting that foreigners withdrew funds from the Korean market.

A series of economic reports showed Thursday that U.S. price pressure had increased and the labor market was still strong.

In Seoul, big-cap shares lost ground across the board.

Samsung Electronics plunged 3.07 percent to 75,900 won on a foreign media report that its latest high bandwidth memory chips failed to pass tests by U.S. artificial intelligence chip giant Nvidia. SK hynix also dropped 0.7 percent to 198,600 won, ending its recent rally.

LG Energy Solution retreated 1.66 percent to 356,000 won, and Samsung SDI and Posco Future M lost 1.11 percent and 2.68 percent to 401,000 won and 254,500 won, respectively.

Bio and auto shares were also weak.

Samung Biologics slid 2.47 percent to 751,000 won, and Celltrion pulled back 1.96 percent to 179,900 won.

Hyundai shed 1.47 percent to 267,500 won, and Hyundai Mobis plummeted 2.64 percent to 221,500 won.

Naver also shed 1.7 percent to 179,000 won, while Kakao went down 2.2 percent to 44,450 won.

The local currency ended at 1,369.50 won against the greenback, up 7.1 won from the previous session's close.

Bond prices, which move inversely to yields, closed lower. The yield on three-year government bonds rose 2.2 basis points to 3.425 percent, and the return on the benchmark U.S. 10-year government bonds added 5.2 basis points to 4.476 percent.

BY KIM JU-YEON, YONHAP [kim.juyeon2@joongang.co.kr]