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Seoul shares sink 1.27 pct on recession woes; Korean won hits over 2-yr low

Stocks 16:05 May 09, 2022

SEOUL, May 9 (Yonhap) -- South Korean stocks fell to about a 17-month low Monday on concerns over a global economic slowdown amid the U.S. central bank's monetary tightening and the prolonged lockdowns of major Chinese cities. The local currency weakened the most against the U.S. dollar in more than two years.

The Korea Composite Stock Price Index (KOSPI) lost 33.70 points, or 1.27 percent, to close at 2,610.81, extending losses for the fifth consecutive session. It is the lowest figure since November 30, when the KOSPI closed at 2,591.34.

Trading volume was moderate at 870.64 million shares worth 9.06 trillion won (US$7.11 billion), with decliners far outpacing gainers 816 to 88.

Foreign investors and institutions sold a net 226.7 billion won and 143.7 billion won worth of shares, respectively, while retail investors bought a net 339.5 billion won.

"Investors remain worried about high inflation and the Federal Reserve's monetary tightening, which could slow down the global economy," Seo Sang-young, an analyst at Mirae Asset Securities Co., said.

Last week, the Fed raised its benchmark interest rate by a half-percentage point and indicated more 50-basis point rate hikes to curb surging inflation.

"Uncertainties have also continued over the Ukraine crisis and China's shutdown of major cities due to the COVID-19 pandemic," he added.

Shanghai has remained locked down since end-March, and Beijing has tightened travel and business restrictions over the spread of COVID-19.

In Seoul, most large-cap shares traded lower, with batteries and auto shares hitting harder.

Top battery maker LG Energy Solution sank 1.87 percent to 394,000 won, and Samsung SDI nosedived 4.21 percent to 591,000 won.

No. 1 carmaker Hyundai Motor lost 0.55 percent to 181,500 won, and Kia fell 1.55 percent to 82,600 won.

Major chemical firm LG Chem sank 3.08 percent to 504,000 won, and top steelmaker POSCO Holdings declined 1.75 percent to 281,000 won.

Financials and insurers also finished lower.

KB Financial fell 1.17 percent to 58,900 won, and Samsung Life lost 2.0 percent to 63,800 won.

Top-cap tech shares ended mixed. Market heavyweight Samsung Electronics shed 0.6 percent to 66,100 won, and No. 2 chipmaker SK hynix remained flat at 107,500 won.

The local currency ended at 1,274.0 won against the U.S. dollar, down 1.3 won from the previous session's close. It marked the lowest since March 19, 2020, when the won had depreciated to 1,285.70 won.


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