Seoul shares rebound on retail buying despite Fed hawkishness and Middle East tensions
Quick Look
Seoul shares recovered from early losses on retail buying as hawkish comments from Fed Chair Kevin Warsh raised concerns over a possible U.S. interest rate hike, while investors remained alert due to escalating Middle East tensions following renewed U.S. strikes in the Strait of Hormuz.
AI-generated summary
Why It Matters
The article discusses market movements in Seoul following hawkish remarks from Federal Reserve Chair Kevin Warsh and escalating tensions in the Middle East after U.S. strikes in the Strait of Hormuz.
SEOUL, Aug. 31 (Yonhap) -- Seoul shares trimmed earlier losses late Monday morning on retail buying, as hawkish comments from Federal Reserve Chair Kevin Warsh raised concerns over a possible interest rate hike next month.
After opening 2.58 percent lower, the benchmark Korea Composite Stock Price Index (KOSPI) erased its losses, trading 133.62 points, or 1.96 percent, lower at 6,655.62 as of 11:20 a.m.
Institutions and foreign investors sold a net 633.74 billion won (US$460 million) and 474.72 billion won worth of stocks, respectively, while retail investors bought a net 502.09 billion won.
In his first major speech since taking the helm of the Fed, Warsh warned that inflation is not slowing meaningfully, leaving the door open to further rate hikes at the annual Jackson Hole symposium in Wyoming on Friday.
In addition to heightened bets on a U.S. rate hike, investors remained on alert amid escalating tensions in the Middle East following renewed U.S. strikes in the Strait of Hormuz.
On Friday (U.S. time), the Dow Jones Industrial Average fell 0.02 percent, while the tech-heavy Nasdaq Composite declined 0.52 percent.
In Seoul, tech stocks led the decline.
Market bellwether Samsung Electronics fell 2.24 percent, while its chipmaking rival SK hynix retreated 2.36 percent.
Top carmaker Hyundai Motor declined 0.44 percent and defense giant Hanwha Aerospace shed 3.07 percent.
Among gainers, leading battery maker LG Energy Solution rose 0.41 percent and leading refiner SK Innovation jumped 7.1 percent.
The Korean won was quoted at 1,375.05 won against the U.S. dollar as of 11:20 a.m., up 4.45 won from the previous stock trading session.
What to Watch
AI outlook โ possibilities, not facts
Federal Reserve may consider interest rate hike at upcoming Jackson Hole symposium
Possible ยท Within days
Middle East tensions may continue to influence global risk sentiment
Possible ยท Within weeks
Open Questions
- Whether the Federal Reserve will actually implement a rate hike next month
- The duration and potential escalation of Middle East tensions following the Strait of Hormuz strikes
- How long retail buying momentum can sustain against institutional and foreign selling pressure
