Seoul: Stocks fall as BOK raises rates; chipmakers drag

SOUTH Korean shares fell on Thursday (May 26), dragged down by heavyweight chipmakers, as the Bank of Korea (BOK) delivered another hawkish move to fight surging inflation. The Korean won weakened, while the benchmark bond yield jumped.

The benchmark Kospi ended down 4.77 points, or 0.18 per cent, at 2,612.45, reversing a nearly 1 per cent gain in early trade.

Technology giant Samsung Electronics fell 0.75 per cent and peer SK Hynix dropped 4.63 per cent to its lowest in 7 months.

The BOK on Thursday delivered back-to-back interest rate hikes and forecast further aggressive increases to wrestle consumer inflation down from 13-year highs.

The rate hike was in line with expectations, but the central bank governor took a much more hawkish stance during a press conference, putting stocks under pressure, said Shinhan Financial Investment’s analyst Choi Yoo-june.

“Our policy focus will be on price stability for some time, and it would be appropriate to say that (time frame) would be for a few months, for now,” Governor Rhee Chang-yong said after the 6-member board’s unanimous rate decision.

Foreigners were net buyers of 36.8 billion won (S$40 million) worth of shares on the main board.

The won was last quoted at 1,267 per dollar on the onshore settlement platform, 0.19 per cent lower than its previous close at 1,264.6.

In offshore trading, the won was quoted at 1,267.6 per dollar, down 0.1 per cent from the previous day, while in non-deliverable forward trading its 1-month contract was quoted at 1,267.2.

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Seoul: Stocks rebound, won hits 3-week high

In money and debt markets, June futures on 3-year treasury bonds fell 0.04 point to 105.68 in late afternoon trade.

The most liquid 3-year Korean treasury bond yield rose by 2.6 basis points to 2.957 per cent, while the benchmark 10-year yield climbed 6.5 basis points to 3.238 per cent. REUTERS