The uncertainty involving the likelihood over the U.S. rate hike is expected to linger on at least five more weeks until late October, as the Federal Open Market Committee overnight chose to freeze in its September rate-setting amid split predictions in the market, analysts said Friday.
As Federal Reserve chair Janet Yellen took an ambiguous position over the timing of raising the rate, South Korea’s financial indexes moved in a limited boundary on the day, despite the relief from a variety of risks from a U.S. hike.
The benchmark KOSPI, which opened lower in the trading session, gained 19.46 points, or 0.98 percent to finish 1,995.95.
A large portion of local analysts had forecasted that the main bourse index could easily break the 2,000-mark if there were a certain level of dovish comments from the FOMC -- irrespective of a rate hike or maintaining from the current 0-0.25 percent.
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Financial indexes are seen at a currency trading office of KEB Hana Bank in Seoul, Friday. (Yonhap) |
Foreigners and local institutional investors led the gain, while small investors maintained their net-seller positon for the fourth consecutive session.
Foreigners stopped their net-seller position for 29 consecutive sessions between Aug. 5 and Sept. 15 and began net-purchasing shares from Wednesday, a day before the FOMC meeting. Over those three sessions, they net-purchased equities worth 500 billion won ($430 million).
In contrast, individuals offloaded about 1.1 trillion won worth over the past week.
The KOSPI has stayed below 2,000 points for more than a month after having reached 2,003.17 on Aug. 10.
Despite the rate freeze, the U.S. dollar has not lost much against the Korean currency. It fell 3.1 won from the previous session to close at 1,162.8 won.
The greenback hovered around 1,200 won in early September amid expectations of a rate hike.
In their move to closely coordinate in the monitoring of the stock and currency market, Korea’s policymakers held a macroeconomic and financial policy meeting earlier in the day. “Volatility at home and abroad is likely to go on as it remains unclear when the Federal Reserve will start to raise the key rates,” said Vice Finance Minister Joo Hyung-hwan.
Joo raised the necessity of being more vigilant over foreign exchange liquidity status.
The last two of eight totally-set FOMC gatherings for 2015 are scheduled for Oct. 27-28 and Dec. 15-16, respectively, in Washington.
Fed Chair Janet Yellen has not ruled out the possibility of a hike within the year, although she has also not clarified that the timing would certainly be this year.
The first three of the 2016 eight gatherings are tentatively slated for Jan. 26-27, March 15-16 and April 26-27, respectively.
By Kim Yon-se (
kys@heraldcorp.com)
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