Seoul: Shares, won tumble on US inflation shock

SOUTH Korean shares and currency tumbled on Wednesday (Sep 14) after US inflation data came in stronger than expectations and firmed views of more aggressive monetary tightening.

The benchmark Kospi ended down 38.12 points or 1.56 per cent at 2,411.42, after falling as much as 2.78 per cent in early trade.

US consumer prices rose in August and underlying inflation accelerated amid rising costs for rents and healthcare, giving the Federal Reserve ammunition to deliver a third 75 basis points interest rate hike next Wednesday and triggering global financial market routs.

The market was shocked by still high inflation pressure and increased volatility is likely to remain until the Fed meeting next week, said Seo Sang-young, analyst at Mirae Asset Securities.

Among heavyweights, technology giant Samsung Electronics fell 2.24 per cent and peer SK Hynix lost 1.9 per cent, while battery maker LG Energy Solution gained 0.3 per cent.

Foreigners were net sellers of shares worth 163 billion won (S$164.3 million) on the main board.

The won ended 1.24 per cent lower at 1,390.9 per dollar on the onshore settlement platform, after hitting the weakest since Mar 31, 2009 at 1,395.5.

In offshore trading, the won was quoted up 0.2 per cent at 1,392.4 per dollar, while in non-deliverable forward trading its 1-month contract was quoted at 1,391.2.

In money and debt markets, September futures on 3-year treasury bonds fell 0.17 point to 104.08 in late afternoon trade.

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Seoul: Shares post biggest surge in 1 1/2 years as heavyweights shine

The most liquid 3-year Korean treasury bond yield rose by 4.2 basis points to 3.593 per cent, while the benchmark 10-year yield rose by 1.3 basis points to 3.658 per cent. REUTERS