Seoul: Stocks end near 1-week low on hawkish Fed, BOK rate hike

[SEOUL] South Korean shares ended at a near one-week low on Thursday (Nov 25), as minutes of the US Federal Reserve's last meeting revealed a hawkish tilt on the board, while the Bank of Korea's rate hike and upgrade in 2022 inflation forecast bolstered bets for further tightening.

The Korean won ended down and the benchmark bond yield also fell.

The benchmark KOSPI closed 14.02 points, or 0.47 per cent, lower at 2,980.27, extending the declines to a third straight session.

Chip giants Samsung Electronics and SK Hynix fell 1.47 per cent and 1.67 per cent, respectively, leading declines, while battery maker LG Chem also slid 1.07 per cent.

The country's central bank raised interest rates and sharply revised up its inflation outlook for next year to 2 per cent on Thursday, as concerns about rising household debt and consumer prices grew.

That comes after a rate hike in New Zealand, the second time in two months, and various Fed policymakers saying they would be open to speeding up the taper of their bond-buying programme and increasing rates if inflation woes lingered.

"Hawkish tone in Fed minutes and the renomination of Fed chair Jerome Powell that strengthened dollar are having unfavourable impacts on emerging markets," said Bookook Securities' analyst Lee Won.

Foreigners were net sellers of 94.4 billion won (S$108.5 million) worth of shares on the main board.

The won ended at 1,190.2 per dollar on the onshore settlement platform, 0.31 per cent lower than its previous close.

In offshore trading, the won was quoted at 1,189.9, down 0.1 per cent from the previous day, while in non-deliverable forward trading its one-month contract was quoted at 1,190.6.

In money and debt markets, December futures on three-year treasury bonds rose 0.24 points to 108.64.

The benchmark 10-year yield fell by 3.2 basis points to 2.362 per cent.

REUTERS