Seoul's Stock Market Remains Unmoved After Bank of Korea Holds Interest Rate

On Thursday morning in Seoul, the stock market showed minimal movement following the Bank of Korea's decision to keep the key interest rate steady. This marks the 11th consecutive session without a change, a streak that reflects the challenges of high inflation and projections of a faster-than-expected economic growth.

Bank of Korea's Steady Rate

The Bank of Korea held its benchmark interest rate at 3.5 percent, a move influenced by persistent inflation concerns and an economic outlook that seems to be improving more quickly than predicted. As a result, anticipation of any rate cuts, particularly mirroring actions by the U.S. Federal Reserve, has dwindled.

Stock Market Reaction

The Korea Composite Stock Price Index (KOSPI) saw a marginal decline of 0.02 percent, indicating a stable yet cautious atmosphere amongst investors. With the index dropping just 0.66 points, to 2,722.80 by 11:20 a.m., traders appeared to be digesting the central bank's message against the backdrop of global economic cues.

Major U.S. stock indexes experienced a downward pull after the Federal Reserve disclosed its own battles with persistent inflation, setting a tone of disappointment that reverberated across international markets.

Individual Movers and Shakers

Within the Seoul market, several heavyweight shares lost value, yet the robust performance of certain tech stocks, such as chipmaker SK hynix, brought some balance to the index. While Samsung Electronics remained steady, SK hynix witnessed a notable surge thanks to positive earnings news from U.S. counterpart Nvidia.

However, other sectors weren't as fortunate. Hyundai Motor experienced a significant drop after a prior rally, and its affiliate Kia Motors also saw a decrease. Additionally, segments such as IT and insurance were weaker, with firms like Naver and Kakao slipping, alongside financial players like KB Financial Group and Samsung Life Insurance facing losses.

Even with mixed signals in various segments, positive movements in shares of entities like LG Chem provided counterweight to losses from the likes of POSCO Holding.

Exchange Rates

The South Korean won also faced depreciation against the U.S. dollar, trading lower at the close of the morning session.

Seoul, Stocks, Rates