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Seoul shares dip over 1 pct on inflation woes

Stocks 15:51 May 19, 2022

SEOUL, May 19 (Yonhap) -- Seoul shares dropped by over 1 percent to snap their two-day winning streak, as investors' appetite for risky assets fell amid fears about high-flying inflation pressure that sparked a massive sell-off on Wall Street. The Korean won steeply fell against the U.S. dollar.

The Korea Composite Stock Price Index (KOSPI) retreated 33.64 points, or 1.28 percent, to close at 2,592.34 points.

Trading volume was moderate at about 663 million shares worth some 9.7 trillion won (US$7.6 billion), with losers outnumbering gainers 767 to 124.

Institutions sold a net 483 billion won, and foreigners offloaded 97 billion won, while retail investors bought 519 billion won.

The key stock index faltered below the 2,600-point mark with the opening bell, tracking an overnight plunge on Wall Street.

The S&P 500 sank 4.04 percent Thursday, the sharpest drop since June 2020, as high inflation and lackluster earnings by giant retailers stoked concerns about a possible recession.

The Dow Jones Industrial Average plummeted 3.57 percent, and the tech-heavy Nasdaq composite tumbled 4.73 percent.

Investors are worried high prices and monetary tightening around the world may lead to a recession.

South Korea's top central banker said earlier this week he is not ruling out the possibility of a hawkish 50-basis-point rate hike in the rate-setting meeting next Thursday.

"The high inflation pressure increased corporate expenses, leading to disappointing earnings by retailers and fears about recession. The earning shock by (giant global retailers like) Target and Walmart sparked an overall fall in retail goods and clothing stocks," the Shinhan Investment Corp. analyst team said in a report.

Most large caps closed lower in Seoul.

Market bellwether Samsung Electronics Co. lost 0.88 percent to 67,500 won, the country's largest chemical company LG Chem shed 1.95 percent to 502,000 won, and internet giant Naver Corp. retreated 1.81 percent to 271,500 won.

Leading automaker Hyundai Motor Co. dropped 1.89 percent to 182,000 won, with No. 2 chipmaker SK hynix declining 2.2 percent to 111,000 won.

Among gainers, battery maker LG Energy Solution Ltd. added 1.34 percent to 415,500 won, and gaming heavyweight Netmarble Corp. jumped 4.44 percent to 80,000 won.

The local currency closed at 1,277.7 won against the U.S. dollar, down 11.1 won from the previous session's close.

jwc@yna.co.kr
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