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Seoul shares almost flat amid Fed uncertainties; Korean won sharply upBy Yonhap
Published : May 4, 2023 - 16:17
South Korean stocks closed almost flat Thursday, after the US Federal Reserve spurned the possibility of an imminent end to the rate hike cycle and ruled out that a rate cut is unlikely to happen anytime soon. The local currency gained sharply against the US dollar.
The benchmark Korea Composite Stock Price Index fell 0.46 points, or 0.02 percent, to 2,500.94. Trading volume was moderate at 797.8 million shares worth 9.85 trillion won ($7.43 billion), with decliners slightly outnumbering gainers 437 to 429.
"Powell blocked market expectations for a rate cut in advance, saying it's not 'appropriate' at this stage as inflation is unlikely to cool rapidly," Han Ji-young, an analyst at Kiwoom Securities Co., said, referring to Fed Chair Jerome Powell.
"This appears to have brought disappointment to markets," Han said.
Powell said after the Federal Open Market Committee meeting that it's too soon to say the rate hike cycle is over as the Fed believes inflation remains too high.
The US central bank raised the interest rate by 0.25 percentage point to a range of 5-5.25 percent at the end of the FOMC meeting Wednesday, the 10th consecutive hike since March 2022.
Although the Fed statement showed a change in language to the effect that it lowers the chances for further rate increases in the future, Powell at the press conference made it clear the Fed will maintain the restrictive policy if necessary as it examines the market impact.
US main stock indexes fell nearly 1 percent.
In Seoul, blue-chip tech and auto stocks declined, while bio and heavy machineries gathered ground.
Tech giant Samsung Electronics fell 0.46 percent to 65,100 won, with chip maker SK hynix losing 1.22 percent to 88,700 won. Top battery maker LG Energy Solution slid 0.53 percent to 564,000 won.
Biotech firm Samsung Biologics, in contrast, rose 2.84 percent to 797,000 won. Vaccine maker SK Bioscience spiked 16.39 percent to 83,100 won on media reports that it won a contract from multinational pharmaceutical company Merck & Co.
Doosan Enerbility, a power plant builder, gained 1.54 percent to 15,810 won.
The local currency ended at 1,322.80 won against the US dollar, up 15.4 won from Wednesday's close. (Yonhap)
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