Seoul stocks retreat on Fed's early tapering concerns

Published : Jun 21, 2021 - 16:08 Updated : Jun 21, 2021 - 16:40

The benchmark Korea Composite Stock Price Index (Kospi) figures are displayed at a dealing room of a local bank in Seoul, Monday. (Yonhap)

South Korean stocks retreated Monday as the US Federal Reserve's hawkish tone last week increased market worries about an early tapering of its accommodative monetary policies. The Korean won fell against the US dollar.

The benchmark Korea Composite Stock Price Index (KOSPI) slumped 27.14 points, or 0.83 percent, to close at 3,240.79 points after dipping to as low as 3,225.56 points.

Trading volume was moderate at about 1.5 billion shares worth some 17.1 trillion won ($15.1 billion), with losers outnumbering gainers 725 to 166.

Foreigners sold a net 892 billion won, while retail investors bought 2 trillion won. Institutions offloaded a net 1.1 trillion won.

Stocks got off to a lackluster start in the wake of the Fed's ongoing discussions about advancing its rate hike timeline.

St. Louis Fed President James Bullard said inflation risks may warrant higher interest rates by 2022, a year sooner than his colleagues' projections.

"Bullard's remark blasted market fears about early tapering," Kiwoom Securities analyst Kim Yu-mi said.

On Tuesday (US time), Federal Reserve Chairman Jerome Powell is scheduled to testify at the House hearing.

In Seoul, market bellwether Samsung Electronics dropped 0.75 percent to 79,900 won, and No. 2 chipmaker SK hynix retreated 2.01 percent to 122,000 won.

Internet portal operator Naver edged down 0.25 percent to 397,000 won, but giant pharmaceutical firm Samsung Biologics increased 2.15 percent to 854,000 won.

Top automaker Hyundai Motor decreased 0.85 percent to 233,000 won, and leading chemical firm LG Chem closed unchanged at 822,000 won. Rechargeable battery maker Samsung SDI advanced 1.04 percent to 681,000 won.

The local currency closed at 1,134.7 won against the US dollar, down 2.4 from the previous session's close.

Bond prices, which move inversely to yields, closed mixed. The yield on three-year Treasurys rose 3.8 basis points to 1.351 percent, while the return on the benchmark five-year government bond fell 0.4 basis point to 1.674 percent. (Yonhap)