Seoul: Shares fall as Fed rate hike bets firm on red-hot US inflation

SOUTH Korean shares fell on Thursday (Jul 14), as a sharp spike in US inflation hardened views that the Federal Reserve might continue with its aggressive monetary policy tightening. The Korean won weakened, while the benchmark bond yield rose.

The benchmark Kospi fell 6.29 points or 0.27 per cent to 2,322.32 as of 6.30 am GMT at close.

Among the heavyweights, technology giant Samsung Electronics fell 0.86 per cent and peer SK Hynix was flat, while battery maker LG Energy Solution fell 0.13 per cent.

US annual consumer prices jumped 9.1 per cent in June, the largest increase in over 4 decades, cementing another 75-basis-point rate hike by the Fed at the end of the month.

South Korean President Yoon Suk-yeol pledged on Thursday to implement policy measures aimed at easing the debt-service burden on low-income earners and the young people at a time of increasing interest rates.

Foreigners were net buyers of shares worth 395.2 billion won (S$421.2 million) on the main board.

The won was quoted at 1,312.1 per dollar on the onshore settlement platform, 0.4 per cent lower than Wednesday.

In offshore trading, the won was quoted at 1,312.2 per dollar, down 0.6 per cent from the previous session, while in non-deliverable forward trading its 1-month contract was quoted at 1,311.2.

The Kospi has fallen 22.01 per cent so far this year, but lost 12.8 per cent in the previous 30 trading sessions.

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The trading volume on Kospi was 343.63 million shares. Of the total 929 traded issues, 433 shares rose.

The won has lost 9.4 per cent against the dollar so far this year.

The most liquid 3-year Korean treasury bond yield rose by 6.3 basis points to 3.275 per cent, while the benchmark 10-year yield rose by 1.2 basis points to 3.315 per cent. REUTERS