SEOUL: South Korean stocks closed almost flat on Thursday as shareholders sat on the sidelines after the central bank determined to freeze the key rate for the month, analysts said. The South Korean won dipped against the greenback.
The benchmark Korea Composite Stock Price Index edged up 0.48 point to end nearly unchanged at 1,914.14. Trading volume was low at 246.7 million shares worth 3.58 trillion won ($3.31 billion), with gainers outnumbering decliners 403 to 397.
Analysts said the local stock market failed to get a boost as the Bank of Korea chose to keep the base rate at the current level of 2 percent.
“Market players are feeling somewhat let down that the key rate was held at the current level, since they thought there was some room left for a further rate cut,” said Kim Yong-gu, an analyst at Samsung Securities Co.
The central bank kept the base rate at a record low of 2 percent for January, extending its wait-and-see stance to a third consecutive month as the government is rolling out stimulus plans to bolster growth.
The bank also lowered its economic growth and inflation outlook for this year as Asia’s fourth-largest economy continues to stumble due to lackluster domestic demand.
But the rate freeze was not a significant drag on stock prices as it was not an unexpected one, according to market analysts.
“Market expectations for a rate cut has not vanished completely and investors see that it’s only a matter of time before it takes place, so (the rate freeze) did not pose a threat to investors’ sentiment,” said analyst Kang Hyun-gie from I’M Investment & Securities Co.
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