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Thursday, March 23, 2023

Stocks fall as investors take cover before Fed rate meeting

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A screen in Hana Bank's trading room in central Seoul shows the Kospi closing at 2,425.08 points on Tuesday, down 25.39 points, or 1.04 percent, from the previous trading day. [YONHAP]
A screen in Hana Bank’s trading room in central Seoul shows the Kospi closing at 2,425.08 points on Tuesday, down 25.39 points, or 1.04 percent, from the previous trading day. [YONHAP]

Shares ended lower Tuesday, tracking falls on Wall Street, as investors stay cautious ahead of the Federal Reserve’s rate decision this week. The won fell against the dollar.

The Kospi fell 25.39 points, or 1.04 percent, to close at 2,425.08 points. The Kospi ended in negative territory for a second straight session after reporting gains in the previous five sessions.

Trading volume was moderate at about 606 million shares worth 10.15 trillion won ($8.2 billion), with gainers outnumbering losers 498 to 367.

Foreigners sold a net 484.9 billion won worth of shares, offsetting institutions and individual stock purchases valued at 475 billion won.

The Fed is widely expected to raise rates by a quarter percentage point to a new range of 4.5 percent to 4.75 percent on Wednesday, slowing the pace of its monetary tightening.

But investors are awaiting the Fed officials’ comments on future policy directions and the U.S. jobs report on Friday (U.S. time) to take a cue for their portfolios’ reorganization, analysts said.

“Foreign selling weighed on the stock market as the Fed’s policy meeting nears and Samsung Electronics came up with disappointing fourth-quarter earnings results,” Kim Seok-hwan, an analyst at Mirae Asset Securities, said.

In Seoul, most large-cap stocks declined.

Samsung Electronics  fell 3.6 percent to 61,000 won, chipmaker SK hynix dropped 2.4 percent to 88,500 won, carmaker Hyundai Motor declined 1.8 percent to 167,000 won, and refiner SK Innovation shed 1 percent to 162,100 won.

Among gainers, cosmetics firm AmorePacific  rose 0.6 percent to 145,500 won, car battery maker LG Energy Solution climbed 2.2 percent to 521,000 won, and the country’s sole aircraft manufacturer Korea Aerospace Industries  was up 0.8 percent to 48,100 won.

The local currency closed at 1,231.90 won against the dollar, up 4.5 won from the previous session’s close.

The Kosdaq gained 1.87 points, or 0.25 percent, to close at 740.49 points.

Bond prices, which move inversely to yields, closed lower. The yield on three-year government bonds rose 6.3 basis points to 3.334 percent, and the yield on the benchmark 10-year government bonds gained 2.6 basis points to 3.536 percent.

BY SEO JI-EUN, YONHAP [seo.jieun1@joongang.co.kr]

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