Seoul stocks end lower after US Fed rate hike

The local stock market had opened a tad higher but soon paired earlier gains as institutional and foreign investors went on a selling spree, targeting some market heavyweights, a move seen as basking in recent gains, the analysts said.

On Wednesday (local time), the US Federal Reserve, as expected, raised its policy rate by 0.25 percentage point and said it plans to reduce its securities holdings, a move that could spur rates to rise further.

"The FOMC result was largely expected, but other factors, such as reducing securities holdings and falling oil prices that hit a seven-month low, have affected the local stock market," said Lee Kyung-min, an analyst at Daeshin Investment & Securities.

Tech shares were in positive terrain, with cap Samsung Electronics ending at 2,284,000 won, up 0.71 percent and LG Display, a major flat panel maker, adding 2.42 percent to 38,150 won.

SK hynix, a major chipmaker, also continued to build up gains extending its winning streak to a third day to end at a record high of 60,600 won, up 2.19 percent from the previous session.

Steel and chemical shares closed bearish, with leading steelmaker Posco closing at 272,000 won, down 2.68 percent. LG Chem, the country's top chemical firm, fell 1.62 percent to 276,500 won, and No. 2 player Lotte Chemical lost 3.2 percent to 332,500 won.

Auto shares also finished lower, with leading automaker Hyundai Motor losing 3.55 percent to 163,000 won. Its sister company, Kia Motors, shed 2 percent to end at 39,300 won, and auto parts maker Hyundai Mobis was down 0.56 percent to 264,500 won.

The local currency closed at 1,124.1 won against the US dollar, down 0.2 won from the previous session's close.

Bond prices, which move inversely to yields, closed mixed. The yield on three-year Treasurys inched up 0.1 basis point to 1.682 percent and the return on benchmark five-year government bonds lost 1.9 basis points to 1.852 percent. (Yonhap)