Seoul shares end lower on growing recession fears

December 16, 2022

SEOUL, Dec. 16 (Yonhap) — South Korean stocks finished slightly lower Friday as investors worried about a global economic slowdown amid the Federal Reserve’s continued push for aggressive monetary tightening. The local currency fell against the U.S. dollar.

The benchmark Korea Composite Stock Price Index shed 0.95 point, or 0.04 percent, to close at 2,360.02, extending a losing streak to a second session.

The trading volume was moderate at 404.6 million shares worth 7.03 trillion won (US$4.31 billion), with decliners outstripping gainers 605 to 261.

The market opened sharply lower, after U.S. shares tumbled as weak retail sales data sparked fears that the Fed’s rate hikes would lead to a recession.

Retail sales for November declined 0.6 percent, worse than economists’ estimate for a 0.3 percent decline.

On Wednesday (U.S. time), the Fed downshifted to a 50 basis point hike from its previous 75 basis point increases. But Chair Jerome Powell said the Fed has “more work to do” to rein in inflation.

Many of the earlier losses, however, were pared on the Seoul bourse on solid foreign buying.

Institutions sold a net 350.17 billion won worth of shares, while foreign and retail investors bought 288.96 billion won and 28.75 billion won worth of shares, respectively.

“Weak economic data from the U.S. and China have deepened fears that aggressive rate hikes are taking a toll on consumers and the broader economy,” Mirae Asset Securities analyst Seo Sang-young said. “Recession woes could affect foreign demand and drag down the index.”