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Seoul shares inch up amid US debt ceiling woes

By Yonhap

Published : May 15, 2023 - 16:30

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An electronic board showing the Korea Composite Stock Price Index at a dealing room of the Hana Bank headquarters in Seoul on Monday. (Yonhap) An electronic board showing the Korea Composite Stock Price Index at a dealing room of the Hana Bank headquarters in Seoul on Monday. (Yonhap)

South Korean stocks snapped a four-day losing streak to close marginally higher Monday, amid concerns over the dispute over the US debt ceiling between the US government and Congress. The local currency edged down against the US dollar.

After swerving in and out of negative terrain, the benchmark Korea Composite Stock Price Index finished up 3.93 points, or 0.16 percent, to 2,479.35. Trading volume was light at 475.7 million shares worth 6.8 trillion won ($5.08 billion), with decliners outnumbering gainers 549 to 315.

"The political deadlock over the debt ceiling issue has fueled concerns over a potential default, dampening consumer sentiment," Han Ji-young, an analyst at Kiwoom Securities Co., said.

"But it's quite appropriate to forecast 'a last-minute settlement,' given the pattern of past debt ceiling negotiations," Han said.

The Joe Biden administration and a divided Congress have yet to reach an agreement over raising the US government's $31.4 trillion borrowing limit, with the Congressional Budget Office warning Friday of significant risks of defaulting on payments in June if the debt ceiling is not raised.

US consumer sentiment slumped to a six-month low in May, adding to concerns the economy is falling into recession.

In Seoul, blue-chip tech and steel stocks closed in the green. Market bellwether Samsung Electronics gained 0.62 percent to 64,500 won, with steel giant Posco Holdings advancing 1.24 percent to 368,000 won.

Battery makers finished mixed, with industry leader LG Energy Solution sliding 0.37 percent to 545,000 won, while its rival Samsung SDI moved up 1.35 percent to 674,000 won.

No. 1 automaker Hyundai Motor pared earlier gains to close down 0.24 percent to 208,000 won.

The state-run Korea Electric Power Corp. fell 2.13 percent to 19,280 won, after the government said earlier in the day it will raise electricity rates and gas prices by 5.3 percent amid mounting losses.

The local currency ended at 1,337.00 won against the US dollar, down 2.5 won from Friday's close. (Yonhap)