Seoul stocks dip following Fed's rate decision; tech and auto sectors hit hard

  • Stock Market News
Seoul stocks dip following Fed's rate decision; tech and auto sectors hit hard

The Korea Composite Stock Price Index ( KOSPI ) lost 28.2 points or 1.1% to 2,531.8 after the first hour of trade on Thursday as investors retreated following the U.S. Federal Reserve's decision to keep its benchmark lending rate steady, while indicating a potential additional rate hike later in the year. 

This downward trend followed a similar trajectory in the U.S. market, where stocks closed lower on Wednesday. The S&P 500 dropped almost 1 percent and the Nasdaq Composite plunged 1.53 percent amid a slide in tech giants, including NASDAQ:AAPL and NASDAQ:TSLA.

"We are prepared to raise rates further if appropriate, and we intend to hold policy at a restrictive level until we are confident that inflation is moving down sustainably toward our objectives," said Fed Chair Jerome Powell.

In Seoul, the tech sector saw mixed results. Samsung Electronics (KS: 005930 ), the world's leading memory chipmaker, saw a slight gain of 0.14 percent, while its rival SK hynix (KS: 000660 ) lost 1.36 percent. Battery shares also started on a negative note, with LG Energy Solution and Samsung SDI both dropping more than 1.2 percent.

The auto industry also suffered losses with Hyundai Motor (OTC: HYMTF ) retreating by 0.62 percent and its smaller affiliate Kia declining by 0.49 percent.

The steel industry was not immune to this downward trend either. Steel giant Posco Holdings lost 1.01 percent, its battery component making unit Posco Future M retreated by 0.61 percent, and its energy trading unit Posco International plunged by 2.83 percent.

Leading chemical producer LG Chem also experienced a significant drop of more than 3 percent.

The local currency mirrored this negative sentiment with the Korean won trading at 1,334.70 against the U.S. dollar at 9:15 a.m., down 4.6 won from Wednesday's close.

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