Seoul: Stocks end flat after central bank's surprise rate hike

[SEOUL] South Korean shares ended flat on Thursday (Apr 14), underperforming broader Asian markets, after the Bank of Korea raised its base rate in a surprise move to combat surging inflation.

The Korean won strengthened, while the benchmark bond yield fell.

The benchmark Kospi closed up 0.22 point, or 0.01 per cent, at 2,716.71, after falling as much as 0.51 per cent in early trade.

Japanese and Chinese stocks gained more than 1 per cent as the latest US data raised hopes that inflation may be close to peaking, though several major central banks raised rates aggressively.

South Korea's central bank raised its benchmark rate to the highest since August 2019 on Thursday as it ramped up the fight against rampant inflation, which threatens its economic recovery.

The stock market saw a volatile session while reactions to the Bank of Korea's rate hike were somewhat muted compared to the currency and bond markets, said Kiwoom Securities' analyst Kim Sae-hun.

Among the heavyweights, technology giant Samsung Electronics fell 1.75 per cent, and peer SK Hynix lost 2.65 per cent and battery maker LG Energy Solution rose 2.32 per cent.

Foreigners were net sellers of 252.3 billion won (S$278.5 million) worth of shares on the main board, extending a sell-off to a seventh straight session.

The won was quoted at 1,224.7 per dollar on the onshore settlement platform, 0.27 per cent higher than its previous close at 1,228.

In offshore trading, the won was quoted flat at 1,223.8 per dollar, while in non-deliverable forward trading its 1-month contract was quoted at 1,223.9.

In money and debt markets, June futures on 3-year treasury bonds rose 0.39 point to 105.49 in late afternoon trade.

The most liquid 3-year Korean treasury bond yield fell by 10.3 basis points to 2.896 per cent, while the benchmark 10-year yield fell by 4.6 basis points to 3.238 per cent. REUTERS