Seoul: Stocks snap five-day winning streak on Fed outcome; won drops

[SEOUL] South Korean shares closed lower on Thursday, snapping a five-day rally, after the US Federal Reserve signalled it might raise interest rates earlier than expected.

The won lost the most in nearly four months, while the benchmark bond yield rose.

The benchmark Kospi closed down 13.72 points or 0.42 per cent at 3,264.96, away from its all-time high touched on Wednesday. The index is up 13.62 per cent so far this year.

US central bank officials moved their first projected rate increases from 2024 into 2023 and opened talks about when to pull back on the Fed's US$120 billion in monthly bond purchase.

Among the heavyweights, chip giants Samsung Electronics and SK Hynix fell 1.10 per cent and 2.32 per cent, respectively, while battery maker LG Chem rose 3.34 per cent and internet giant Naver slid 0.38 per cent.

Foreigners were net sellers of 348 billion won (S$411.7 million)worth of shares on the main board.

"The Kospi slid on hawkish tone from the Federal Open Market Committee and profit-taking following a record close in the previous session," said Seo Sang-young, analyst at Mirae Asset Securities.

The won ended at 1,130.4 per dollar on the onshore settlement platform, down 1.17 per cent to mark its sharpest daily loss since Feb 26.

In offshore trading, the won was quoted at 1,130.7 per dollar, up 0.2 per cent, while in non-deliverable forward trading, its one-month contract was quoted at 1,130.4.

In money and debt markets, September futures on three-year treasury bonds fell 0.14 point to 110.20.

The most liquid three-year Korean treasury bond yield rose by 3.9 basis points to 1.325 per cent, while the benchmark 10-year yield rose by 1.7 basis points to 2.088 per cent.

REUTERS