Market continues slide as won hits 8-week low

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Market continues slide as won hits 8-week low


Korean stocks extended their losing streak to six sessions on Monday as concerns over a faster pace of U.S. rate rises caused foreigners to remain net sellers. The local currency fell to an eight-week low against the U.S. greenback.

The benchmark Kospi lost 13.69 points, or 0.6 percent, to close at a seven-week low of 2,253.83. The index has been declining since Sept. 28.

Trading volume was light at 210 million shares worth 4.36 trillion won ($3.85 billion).

Analysts said that investors became more worried that the U.S. central bank will speed up its monetary tightening next year following recent comments on the U.S. economy by Federal Reserve Chairman Jerome Powell.

“Investors have underestimated the pace of interest rates movement, and they have to change their consensus on the U.S. monetary policy,” said Kim Yong-koo, an analyst from Hana Financial Investment. “U.S. bond rates are rising, while investors seek safer assets.”

Overseas investors sold a net 176.8 billion won worth of shares on the main exchange, leading the Kospi’s decline for more than a week.

Individual investors scooped up a net 137.6 billion won and institutions purchased a net 25.8 billion won.

Financial shares ended bearish as KB Financial Group fell 0.36 percent to 56,000 won and top brokerage house Mirae Asset Daewoo retreated 1.39 percent to 7,820 won.

Leading carmaker Hyundai Motor sank 2.01 percent to 122,000 won and its sister Kia Motors dropped 0.88 percent to 33,900 won.

Oil refineries were among the losers, with industry leader SK Innovation tumbling 2.9 percent to 217,500 won and No. 3 S-Oil skidding 2.56 percent to 133,000 won.

On the other hand, Samsung Electronics, the largest share on the bourse, gained 0.56 percent to close at 44,950 won and runner-up SK Hynix rose 1.28 percent to 71,200 won.

The secondary Kosdaq also fell 6.55 points, or 0.85 percent, to end at 767.15.

The tech and bio-heavy index ended in negative terrain, dragged down by a 1.2 percent decline in the U.S. Nasdaq.

The Korean won closed at 1,132.70 won against the U.S. dollar, up 2.3 won from the previous trading session. This is its lowest value since Aug. 13.

Bond prices, which move inversely to yields, ended lower. The yield on three-year bonds added 0.7 basis points to 2.09 percent, and the return on ten-year bonds did not move at 2.45 percent.

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