 |
By Lee Min-hyung
Korean stocks pulled back Friday as overnight declines on Wall Street sapped investor sentiment here.
This situation heightened fears that the benchmark KOSPI might extend its losses at a time when the U.S. Federal Reserve is scheduled to carry out additional big rate hikes by the end of this year.
The main bourse closed at 2,644.51, down 1.23 percent from the previous session, after foreign and institutional investors went on a selling spree. The secondary KOSDAQ also widened its losing streak and closed down 1.76 percent during the same period.
The major stock indices in New York went on a relief rally on Wednesday soon after the Fed's 50-basis-point rate hike. But investors took flight the following day, as inflationary concerns remain in place despite the aggressive monetary policy.
Market experts said that stock markets would continue to face volatility, as the much-anticipated rate hikes by the Fed cannot be a cure-all for the ongoing inflationary concerns.
"The Fed's latest monetary decision is favorable to the market from a short-term viewpoint, as it cleared away once-lingering fears that the Fed might push for a giant rate hike of 75 basis points," eBest Investment & Securities analyst Choi Kwang-hyuk said.
"The market is worried about geopolitical risks, price increases and demand reduction, not the Fed's rate hikes," he said. "For now, no signs have been detected of a drop in prices, nor do we find any clue to alleviate such lingering risk factors, so we cannot support any optimistic approach to the market from a mid- to long-term perspective."
Local financial authorities also stepped up vigilance concerning the stock market fall here.
"We need to preemptively deal with any risk factors in the economy and financial situations here," First Vice Finance Minister Lee Eog-weon said Friday morning in a meeting to discuss the impact of the Fed's rate hikes. "The financial and foreign exchange markets here will remain vulnerable to any internal and external variables for the time being."
Naver and Kakao, two of Korea's representative growth stocks, fell sharply on the same day. Naver closed at 272,000 won per share, down 3.55 percent from the previous trading day. Kakao suffered a bigger loss, closing down 5.28 percent during the same period.
Analysts remained pessimistic over their near-term rebounds on concerns over slowdowns in their profit growth.
"We have revised down Kakao's target stock price to 130,000 won per share," Hanwha Investment & Securities analyst Kim So-hye said. "Kakao shares have plummeted by around 29 percent for the past month, reflecting concerns over its sluggish growth, due to its weak sales growth and increased spending. The company is expected to be able to achieve a major stock rebound when it sends a clear signal for new business in areas such as blockchain and global businesses."
