Seoul: Shares mark worst week in 5 months on recession fears

SOUTH Korean shares fell on Friday (Jun 17) to post their worst week in nearly 5 months, as a flurry of interest rate hikes across the globe this week raised fears of a recession. The Korean won weakened, while the benchmark bond yield rose.

The benchmark Kospi slipped 10.48 points or 0.43 per cent to 2,440.93, marking its lowest close since Nov 6, 2020. The index fell 2.24 per cent in early trade.

For the week, the Kospi fell 5.97 per cent - its sharpest weekly drop since late January.

Faster tightening by central banks fanned recession worries, said Daishin Securities’ analyst Lee Kyoung-min, adding that the local stock market recovered some losses in afternoon trade after a rebound in US stock futures.

Following the Fed’s 75-basis-point rate hike, the Bank of England raised interest rates by 25 basis points on Thursday.

Among heavyweights, technology giant Samsung Electronics dropped 1.81 per cent and peer SK Hynix fell 1.03 per cent, while battery maker LG Energy Solution lost 0.35 per cent.

Foreigners were net sellers of 687.1 billion won (S$736.3 million) worth of shares on the main board.

The won was last quoted at 1,287.3 per dollar on the onshore settlement platform, 0.13 per cent lower than its previous close. The currency weakened 1.43 per cent for the week.

In offshore trading, the won was quoted flat at 1,288.5 per dollar, while in non-deliverable forward trading its 1-month contract was quoted at 1,288.7.

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In money and debt markets, June futures on 3-year treasury bonds fell 0.03 point to 103.57 in late afternoon trade.

The most liquid 3-year Korean treasury bond yield rose by 1.1 basis points to 3.741 per cent, while the benchmark 10-year yield rose by 3 basis points to 3.790 per cent. REUTERS