(LEAD) Seoul shares drop to nearly 14 months on Fed uncertainties, virus concerns

(ATTN: ADDS bond yields bottom, photo)

SEOUL, 25 Jan. (Yonhap) — South Korean stocks fell to a near 14-month low on Tuesday as investors braced for hawkish comments from the U.S. Federal Reserve. The Korean won fell against the US dollar.

The benchmark Korea Composite Stock Price Index (KOSPI) plunged 71.61 points, or 2.56%, to close at 2,720.39 points. The reading marks the lowest number since the close of 2,700.93 points on December 8, 2020.

Trading volume was moderate at around 630 million shares worth around 11.5 trillion won ($9.6 billion), with losers outnumbering winners 862 to 55.

Foreigners dumped a net worth of 463 billion won worth of stocks and institutions sold 171 billion won, while retail investors bought 586 billion won.

After a weak start, the key stock index quickly fell amid massive overseas selling.

Stocks extended their losing streak to a third session, largely because investors feared the U.S. central bank was hinting at more hawkish policies than market consensus.

The Federal Reserve is expected to end its two-day monetary policy meeting on Wednesday (local time), which should provide clues on its monetary policy stance.

South Korea’s record virus count has also added to concerns about tightened quarantine measures.

It is the first time the number of daily cases has exceeded the 8,000 mark since the country reported the first COVID-19 infection on January 20, 2020.

“It looks like equity investors’ appetite for risky assets seems to have waned (in today’s trading),” said Lee Jin-woo, an analyst at Meritz Securities.

Most of the large caps have closed in Seoul.

Market leader Samsung Electronics fell 1.46% to 74,000 won, and No. 2 chipmaker SK hynix lost 0.84% ​​to 118,000 won.

Giant battery maker LG Chem fell 4.17% to 643,000 won, while Samsung SDI fell 5.87% to 642,000 won. Internet portal operator Naver fell 1.98% to 322,000 won.

Pharmaceutical giant Samsung Biologics fell 3.82% to 780,000 won, and major automaker Hyundai Motor fell 1.27% to 194,500 won.

The local currency closed at 1,198.6 won per US dollar, down 2.5 won from the previous session’s close.

Bond prices, which move inversely to yields, closed lower. The yield on three-year Treasury bills rose 6.2 basis points to 2.174%, and the yield on the benchmark five-year government bond rose 5.7 basis points to 2.393%.

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