Seoul shares down amid Fed rate hike woes; Korean won sharply down

Seoul shares closed lower Thursday as investors digested the Federal Reserve's minutes that hinted at more aggressive interest rate hikes to temper inflation. The Korean won sharply fell against the US dollar.

The benchmark Korea Composite Stock Price Index (KOSPI) fell 8.42 points, or 0.33 percent, to close at 2,508.05 points.

Trading volume was moderate at about 370.84 million shares worth some 6.98 trillion won ($5.3 billion), with losers outnumbering gainers 542 to 301.

Institutions sold a net 447 billion won worth of stocks, offsetting foreigners and individuals' combined purchases valued at 440 billion won.

In the minutes released Wednesday (US time), Fed policymakers projected the economy to expand in the second half of 2022 and made it clear that they intend to continue raising rates enough to cool the economy and combat inflation.

The US central bank raised its benchmark interest rate by 75 basis points in July for a second straight time.

"Definitely, the Fed's stance toward further tightening weighed on the market. Investors are concerned about aggressive rate hikes by central banks around the globe to tame inflation, which could result in a global recession," No Dong-kil, an analyst at Shinhan Investment Corp., said by phone.

Most large-cap stocks declined across the board.

No. 2 chipmaker SK hynix Inc. fell 1.4 percent to 95,700 won. Top carmaker Hyundai Motor Co. declined 2.1 percent to 186,000 won, and national flag carrier Korean Air Lines Co. shed 1.9 percent to 26,500 won.

Among gainers, market bellwether Samsung Electronics Co. rose 1.8 percent to 61,500 won, leading refiner SK Innovation Co. climbed 0.2 percent to 210,500 won, and state-run Korea Gas Corp. gained 1.1 percent to 41,700 won

The local currency closed at 1,320.70 won against the US dollar, down 10.40 won from the previous session's close. (Yonhap)