Seoul: Stocks end near 7-week low on Fed rate hike expectations, China Covid worries

[SEOUL] South Korean shares fell on Tuesday (Mar 15) to their lowest close in nearly 7 weeks, as investors fretted over the prospects of US rate hikes and further pandemic-fuelled supply chain disruptions in China. The Korean won was nearly unchanged, while the benchmark bond yield rose.

The benchmark Kospi ended down 24.12 points, or 0.91 per cent, at 2,621.53, the lowest since Jan 27 and extending its losses to a third session.

Technology heavyweights led the declines, tracking the Nasdaq's 2 per cent slump overnight. Chip giants Samsung Electronics and SK Hynix fell 1 per cent and 3.02 per cent, respectively, while battery maker LG Energy Solution slid 1.1 per cent.

Investors' focus is on this week's Federal Reserve meeting, where the central bank is expected to raise interest rates for the first time in 3 years on Wednesday in an effort to tame the red-hot inflation.

Further dampening risk appetite, multiple Chinese cities including tech hub Shenzhen have tightened Covid restrictions, forcing companies from Apple supplier Foxconn to automakers Toyota and Volkswagen to suspend some operations.

Meanwhile, no apparent progress was seen even as Russian and Ukrainian delegations held a fourth round of talks, adding to the nervousness in markets.

Foreigners were net sellers of 673.8 billion won (S$739.1 million) worth of shares on the main board.

The won ended at 1,242.8 per dollar on the onshore settlement platform, just 0.04 per cent lower than its previous close.

In offshore trading, the won was quoted at 1,242.9, while in non-deliverable forward trading its 1-month contract was quoted at 1,243.1.

In money and debt markets, March futures on 3-year treasury bonds fell 0.04 point to 108.10.

The benchmark 10-year yield rose by 2.7 basis points to 2.765 per cent. REUTERS