SEOUL: South Korean stocks fell on Thursday morning, in line with their regional peers, as the US Federal Reserve indicated that it was still on track to lift up interest rates this year.
The Korea Composite Stock Price Index (KOSPI) fell 0.3 per cent to 1,956.17 points as of 0215 GMT, retreating from a seven-week high in the previous session though still holding above the index’s 60-day moving average.
Although the Fed reiterated that it would remain “patient” in deciding when to normalise policy, its surprisingly upbeat assessment of the US economy hinted that it was on a steady course en route to its first rate hike since 2008.
“The Fed’s upgraded outlook on economic conditions and the labour market compared to last month ran contrary to recent market expectations of a pushback in the rate hike timeline,”said Hong Seok-chan, an analyst at Daishin Securities.
Commodity-linked shares underperformed as oil prices fell again to new 6-year lows, with SK Innovation sliding 2.5 per cent.
Shares in Naver Corp, South Korea’s largest web portal operator, slumped 3.9 per cent after its fourth-quarter earnings came in below forecasts. Highlighting a busy week in the earnings season, bourse giant Samsung Electronics announced profits of 5.3 trillion won (US$4.88 billion) during the October-December period, in line with expectations. Samsung shares were down 0.4 per cent.
The large-cap benchmark KOSPI 200 index fell 0.4 per cent while the junior, tech-heavy KOSDAQ ticked up 0.03 per cent.
The South Korean won fell on Thursday as investors priced in expectations of an interest rate cut by the Bank of Korea, after Singapore’s surprising easing of policy on Wednesday pressured regional peers to further slash rates.
The local currency was trading at 1,091.8 to the dollar as of 0215 GMT, compared to 1,084.5 quoted at the end of Wednesday’s session.
March futures on three-year treasury bonds added 1 basis points to trade at 108.66.
