South Korea’s benchmark Kospi and Korean won fell on March 8 as the oil price spike triggered by the US embargo on Russian crude threatens to fuel mounting inflationary pressure here.
The main exchange Kospi settled down 1.09% from the previous session at 2,622.4, down for the third straight day.
Foreigners sold 472.8 billion won ($382.2 million) worth of shares, while institutions sold 293 billion won net. Retail investors bought a net amount of 732 billion won.
The weak performance followed an overnight tumble on Wall Street, which saw its biggest drop in more than a year, taking inspiration from the growing possibility that the United States would ban barrels from Russia, the second-largest exporter. world of crude.
The benchmark S&P 500 lost 2.9% to 4,201.09, its biggest drop in 16 months. The Dow Jones Industrial Average fell 2.4% to 32,817.38, while the Nasdaq composite fell 3.6% to 12,830.96.
West Texas Intermediate crude futures, the US oil benchmark, closed at $119.40 a barrel on March 7 (Eastern Standard Time) up 3.2%, after touching 130.50 $ earlier in the day. Brent crude, the international standard, closed at $123.21 a barrel, up 4.3%, after hitting $139 earlier.
“Market fears are being fueled by the longer-than-expected Ukraine crisis and concerns of higher inflation over the possibility that the United States may ban crude imports from Russia,” Han Ji said. -young, an analyst at Kiwoom Securities.
“The Korean stock market is expected to come under downward pressure on fears of a global economic contraction today,” he added.
The value of the Korean won continued to weaken against the US greenback, surpassing the 1,230 won mark for the first time since May 2020. It stood at 1,237 won against the dollar, or 0, 53% more than the previous session.
On March 7, the local currency broke through 1,220 won for the first time against the dollar since June 2, 2020, raising concerns about the current strong trend in the dollar.
“The exchange rate of the dollar gained over the next three months will likely fluctuate and the won may weaken less, but the dollar’s strong trend is expected to continue for the rest of the year,” the NH analyst said. Investment & Securities, Kwon Ah-min. noted.
“The pressure on global energy prices in the near future is closely tied to how central banks around the world implement monetary policy normalization.”
Market giant Samsung Electronics fell below 70,000 won and closed down 0.86% from the previous session at 69,500 won.
The country’s second-largest chipmaker SK hynix fell 1.26% to 118,000 won, while leading chemical company LG Chem fell 2.14% to 503,000 won.
Major internet portal operator Naver slid 0.81% to close at 304,500, failing to extend the gain it posted earlier.
The tech-heavy Kosdaq secondary exchange closed down 1.29% from the previous close at 870.14.
THE KOREA HERALD/ASIA INFORMATION NETWORK