Seoul: Shares end lower on Fed rate-hike fears, rise in bond yields

SOUTH Korean shares ended slightly lower on Friday (Oct 21) and ended the week flat, amid concerns over US Federal Reserve’s aggressive monetary tightening. The Korean won weakened, while the benchmark bond yield hit an 11 1/2-year high.

The benchmark Kospi ended down 4.97 points or 0.22 per cent at 2,213.12, falling for a third session. The index ended the week with a marginal gain of 0.03 per cent.

Fed Bank of Philadelphia President Patrick Harker said the central bank is not done with raising its short-term rate target amid red-hot of inflation, sending stocks lower and bond yields up sharply.

“The Fed’s aggressive tightening and a rise in US Treasury yields increased downward pressure on the stock market, but losses were capped with the issue having been there for a while by now,” said Lee Kyoung-min, an analyst at Daishin Securities.

Technology giant Samsung Electronics rose 0.72 per cent and peer SK Hynix gained 0.33 per cent, while automakers Hyundai Motor and Kia lost 0.89 per cent and 0.73 per cent, respectively.

Battery maker Samsung SDI jumped 6.45 per cent, its biggest daily gain since March 2021, while peers LG Energy Solution and SK Innovation advanced 0.81 per cent and 0.65 per cent each.

Of the total traded issues of 932, only 172 advanced.

Foreigners were net buyers of shares worth 22.5 billion won (S$22.3 million).

The won was last quoted at 1,439.8 per dollar on the onshore settlement platform, 0.45 per cent lower than Thursday. The currency weakened for a second week with a 0.79 per cent weekly loss.

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December futures on three-year treasury bonds dropped 0.34 point to 101.15.

The most liquid three-year Korean treasury bond yield rose as much as 18.1 basis points to hit a more than three-week high of 4.5 per cent, while the benchmark 10-year yield jumped as much as 25 basis points to 4.665 per cent, its highest since March 2011. REUTERS