South Korean inventory market shares dropped by barely over two p.c on Monday to achieve a one-year low, Yonhap Information Company reported, noting the event got here amid elevated concern amongst Asian traders {that a} international financial recession could also be on the horizon.
“The benchmark Korea Composite Stock Price Index (KOSPI) slumped 49.9 points, or 2.04 percent, to close at a fresh 19-month low of 2,391.03 points. The index dipped to an intraday low of 2,372.35 points,” the Seoul-based Yonhap reported on June 20.
Additional detailing South Korea’s inventory market exercise on Monday, Yonhap wrote:
Buying and selling quantity was average at about 583 million shares value some 9 trillion received (US$7 billion), with losers outnumbering gainers 585 to 62.
Foreigners dumped a internet 662 billion received, whereas establishments purchased 446 billion received and retail traders bought 183 billion received.
After a weak begin, the KOSPI more and more misplaced floor, led by chipmakers and different market heavyweights.
Seoul shares dipped on Monday “as investors were gripped by fears that a recession in the global economy may come amid faster-than-expected monetary tightening in major economies,” Yonhap noticed.
“The Fed’s (hawkish) stance has kept the overall investor sentiment weak,” South Korean monetary analyst Park Gwang-nam, from Mirae Asset Securities, informed the information company on June 20.
A foreign money dealer walks by the screens exhibiting the Korea Composite Inventory Worth Index (KOSPI) at a overseas trade dealing room in Seoul, South Korea, Friday, June 3, 2022. (AP Picture/Lee Jin-man)
Park and Yonhap referred to the U.S. Federal Reserve’s choice on June 15 to lift its rate of interest by three-quarters of a share level in an effort to fight record-high inflation. The motion marked the most important rate of interest hike by the U.S. Federal Reserve since 1994, although it was “widely expected by investors,” in accordance with Reuters.
“Ending weeks of speculation, the rate-setting Federal Open Market Committee took the level of its benchmark funds rate to a range of 1.5%-1.75%, the highest since just before the Covid [Chinese coronavirus] pandemic began in March 2020,” CNBC reported on June 16.
“Stocks were volatile after the decision but turned higher as Fed Chairman Jerome Powell spoke in his post-meeting news conference,” the monetary information outlet noticed.
“Clearly, today’s 75 basis point increase is an unusually large one, and I do not expect moves of this size to be common,” U.S. Federal Reserve Chairman Powell mentioned on June 15.
“He added, though, that he expects the July [U.S. Federal Reserve] meeting to see an increase of 50 or 75 basis points. He said decisions will be made ‘meeting by meeting’ and the Fed will ‘continue to communicate our intentions as clearly as we can,’” CNBC relayed of Powell’s remarks.
The South Korean inventory market’s speedy response to the U.S. Federal Reserve’s rate of interest spike on June 15 was almost the precise reverse of its exercise on June 20.
“South Korean shares rose more than 2% on Thursday [June 16] to snap [a] seven-day losing streak, after the U.S. central bank delivered a 75-basis point rate hike as expected. The Korean won gained, while the benchmark bond yield fell,” Reuters reported.
South Korea’s home foreign money, the Korean received, closed on June 20 at 1,292.4 received in opposition to the U.S. greenback. The dip marked a lower of 5.1 Korean received from the earlier session’s shut, in accordance with Yonhap.
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