Seoul: Shares end flat as Fed relief rally loses steam

SOUTH Korean shares erased much of early gains to end only a bit higher on Thursday (Jun 16) amid lacking investor confidence in economic growth after the US Federal Reserve delivered a 75 basis point rate hike as expected. The Korean won strengthened, while the benchmark bond yield fell.

The benchmark Kospi ended up 4.03 points or 0.16 per cent to 2,451.41, snapping a 7-day losing streak. The index rose as much as 2.16 per cent before sharply erasing the gains.

The US Federal Reserve on Wednesday raised the target federal funds rate by 3-quarters of a percentage point to a range of between 1.5 per cent and 1.75 per cent, its largest increase in more than a quarter of a century but widely expected by investors.

Worries of global economic slowdown remained to be a pressure for the relief rally seen in early session to continue, said Mirae Asset Securities' analyst Seo Sang-young, adding that the country's new economic policies that were supposedly positive for the market had limited impact.

The South Korean government proposed to lower corporate tax rates and remove capital gains taxes on retail stock investors, as it cut this year's growth outlook on Thursday.

Meanwhile, the country's top economic and financial officials agreed at a rare meeting to strengthen coordinated efforts to keep the markets stable.

Among the heavyweights, technology giant Samsung Electronics rose 0.33 per cent but peer SK Hynix fell 0.51 per cent, while battery maker LG Energy Solution gained 1.67 per cent.

Foreigners were net buyers of 156.4 billion won (S$168.9 million) worth of shares on the main board, ending a 9-day selling streak.

The won was last quoted at 1,285.6 per dollar on the onshore settlement platform, 0.38 per cent higher than its previous close.

In money and debt markets, June futures on 3-year treasury bonds fell 0.05 point to 103.70 in late afternoon trade.

The most liquid 3-year Korean treasury bond yield rose by 3.1 basis points to 3.705 per cent, while the benchmark 10-year yield fell by 5.5 basis points to 3.748 per cent. REUTERS

KEYWORDS IN THIS ARTICLE

READ MORE

BT is now on Telegram!

For daily updates on weekdays and specially selected content for the weekend. Subscribe to t.me/BizTimes