Global Market: South Korean shares fall over 1% as chip stocks retreat

ETMarkets.com

Seoul shares retreat as chipmakers lose ground, with investors awaiting fresh signals on interest rates and economic growth.

The benchmark KOSPI fell 66.34 points, or 1.16%, to 5,669.32 as of 0126 GMT. The index had surged 3.3% on Wednesday, marking its biggest single-day gain in six weeks, driven by a rebound in semiconductor stocks.

According to Reuters, investors turned cautious after the strong gains, with profit-taking weighing on major chipmakers.

Samsung Electronics fell 1.34%, while SK Hynix declined 1.93%. Losses extended to other heavyweight stocks, with battery maker LG Energy Solution sliding 3.77%. Hyundai Motor dropped 2.58%, while Kia Corp lost 1.18%.

Of the 910 stocks traded, 528 declined and 322 advanced. Foreign investors, however, were net buyers of shares worth 107.4 billion won ($80.97 million).

Bank of Korea policy outlook in focus

The Bank of Korea kept its benchmark interest rate unchanged on Thursday, pausing after delivering consecutive quarter-point rate hikes in July and August.

However, strong growth driven by the semiconductor industry and inflation remaining above the central bank’s target have kept the possibility of further monetary tightening open.

Investors awaited Governor Shin Hyun Song’s press conference, scheduled for 0210 GMT, for further clues on the interest-rate trajectory and the outlook for South Korea’s chip-led economic expansion.

Bond yields fall; won weakens marginally

In currency markets, the South Korean won was quoted at 1,326.2 per dollar on the onshore settlement platform, down 0.02% from its previous close of 1,326.0.

South Korean government bond futures edged higher, with December futures on three-year Treasury bonds gaining 0.05 point to 103.19.

In the cash bond market, the yield on the most liquid three-year Korean Treasury bond fell 3.3 basis points to 3.799%, while the benchmark 10-year yield declined 3.1 basis points to 4.136%.