Seoul: Stocks end near 13-month low on tech rout, Fed rate hike bets

[SEOUL] South Korean shares ended at a more than 1-year low on Friday (Jan 21), as tech stocks tracked an overnight rout on Nasdaq, while investor sentiment was pressured by fears of inflation and aggressive policy tightening by the US Federal Reserve. Both the Korean won and the benchmark bond yield fell.

The benchmark Kospi closed down 28.39 points, or 0.99 per cent, at 2,834.29, their lowest since Dec 29, 2020 and marking the sixth session of decline in 7.

For the week, it dropped 3 per cent, its sharpest decline since the week ended Oct 1.

Among the heavyweights, Samsung Electronics and SK Hynix fell 1.18 per cent and 4.8 per cent, respectively, while Naver also slid 0.6 per cent.

Concerns that the Fed will aggressively move to raise rates this year is taking a toll on the market, with investors anxiously awaiting the US central bank's policy meeting next week.

Volatility in Kospi has risen in recent weeks ahead of LG Energy Solution's initial public offering, with institutional and retail investors placing bids valued at record US$12.8 trillion and US$95.6 billion, respectively.

Customs data showed South Korea's exports during Jan 1-20 soared 22 per cent from a year earlier, but that did little to uplift sentiment.

Foreigners were net sellers of 221.1 billion won (S$249.7 million) worth of shares on the main board.

The won ended at 1,194.0 per dollar on the onshore settlement platform, 0.13 per cent lower than its previous close.

The won weakened 0.56 per cent on a weekly basis, marking the fourth week of decline in 5.

In offshore trading, the won was quoted at 1,193.1, while in non-deliverable forward trading its 1-month contract was quoted at 1,194.0.

The benchmark 10-year yield fell by 1.9 basis points to 2.538 per cent.

REUTERS