Seoul stocks dip for 2nd day on rate hike concerns

South Korean stocks extended their losing streak to a second session Friday amid concerns about fast rate hikes at home and in the United States. The Korean won rose against the US dollar.

The benchmark Korea Composite Stock Price Index (Kospi) declined 40.17 points, or 1.36 percent, to close at 2,921.92 points.

Trading volume was moderate at about 523 million shares worth some 10.6 trillion won ($8.9 billion), with losers outnumbering gainers 663 to 209.

Institutions sold a net 600 billion won and foreigners offloaded 246 billion won, while retail investors bought 814 billion won.

Stocks opened steeply lower, tracking an overnight stock plunge on Wall Street as US Federal Reserve officials signaled aggressive policies to rein in the rising inflation pressure.

The retreat was led by losses in tech stocks, usually more sensitive to rate hikes compared with other sectors.

The tech-heavy Nasdaq composite plunged 2.51 percent overnight, largely affected by hawkish comments by multiple Federal Reserve officials who support the US central bank's March rate hike.

The Bank of Korea raised its key policy rate by 0.25 percentage point to 1.25 percent, a return to the pre-pandemic level in 22 months.

"Stocks came under pressure from the US stock fall last night. The BOK's rate hike and its signal to stick to the current (hawkish) stance also seem to have weighed on the markets," Eugene Investment & Securities analyst Huh Jae-hwan said.

Most large caps closed in Seoul.

Top cap Samsung Electronics shed 0.77 percent to 77,300 won, and No. 2 chipmaker SK hynix decreased 0.77 percent to 128,500 won.

Internet portal operator Naver retreated 1.72 percent to 342,000 won, leading chemical firm LG Chem slumped 5.17 percent to 716,000 won, and top automaker Hyundai Motor lost 0.48 percent to 209,000 won.

Bio giant Celltrion tumbled 12.31 percent to 171,000 won amid rumors that the regulator is looking into its alleged accounting fraud case.

The local currency closed at 1,187.3 won against the US dollar, up 0.2 won from the previous session's close. (Yonhap)