Seoul stocks down ahead of U.S. Fed meeting

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Seoul stocks down ahead of U.S. Fed meeting

Korean shares closed lower Thursday, snapping a three-day consecutive rise, on uncertainty over the U.S. Federal Reserve’s much-awaited rate cuts. The won depreciated against the dollar.

The benchmark Kospi lost 13.64 points, or 0.69 percent, to close at 1,951.01.


Trading volume was moderate at some 427 million shares worth about 4 trillion won ($3.3 billion).

The index swerved in and out of positive terrain in the morning session but extended losses in the afternoon session, despite overnight gains on Wall Street.

Coupled with stronger-than-expected retail sales, minutes from the latest U.S. Federal Open Market Committee (FOMC) meeting held last month dimmed the outlook for the Fed’s sharp rate cuts in the future.

Fed Chairman Jerome Powell is expected to offer a message on the future direction of U.S. monetary policy at the annual Jackson Hole seminar, slated to be held Thursday through Saturday.

“The world is waiting to hear the Jackson Hole speech. Whether there will be one or two rate cuts before the year’s end is not important. What is needed is a way to overcome challenges facing monetary policies. A new ‘whatever it takes’ approach is urgently needed,” said Kim Yoon-seo, a senior researcher at Shinhan Investment.

Individuals bought a net 162 billion won worth of shares, and foreign investors sold a net 122.6 billion won worth. Institutions sold a net 51.6 billion won of stocks.

Most large caps closed in negative terrain.

Samsung Electronics lost 1.01 percent to 44,050 won, while SK Hynix plunged 2.64 percent to 73,800 won. LG Electronics decreased 0.16 percent to 60,600 won as well.

Automaker Hyundai Motor tumbled 1.2 percent to 124,000 won, while its auto parts affiliate Hyundai Mobis fell 1.84 percent to 240,500 won. Its smaller affiliate Kia Motors fell 1.76 percent to 41,950 won.

LG Chem dropped 2.44 percent to 320,000 won. On the other hand, oil refiner SK Innovation advanced 0.3 percent to 164,500 won.

S-Oil added 0.43 percent to 92,700 won.

The Kosdaq fell 3.71 points, or 0.60 percent, to end the session at 612.25.

The won closed at 1,207.40 won against the dollar, up 4.90 won from the previous session’s close.

Bond prices, which move inversely to yields, ended higher. The yield on three-year bonds fell 2.6 basis points to 1.13 percent. The yield on 10-year bonds fell 4.8 basis points to 1.23 percent.

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