Seoul: South Korean stocks closed lower Wednesday after hitting a new high as investors cashed in profits and digested the U.S. Federal Reserve chair's comment that stock prices are overvalued. The local currency was trading lower against the U.S. dollar.
According to Yonhap News Agency, the benchmark Korea Composite Stock Price Index (KOSPI) fell 14.05 points, or 0.4 percent, to close at 3,472.14. Trade volume was moderate at 281 million shares worth 11.3 trillion won (US$8.08 billion), with losers beating gainers 684 to 192. Foreigners sold a net 251.6 billion won worth of local shares, while individuals bought a net 4.9 billion won. Institutions bought a net 212 billion won.
Investors sat on the sidelines after U.S. Federal Reserve Chair Jerome Powell said in a speech that equity prices may be "fairly highly valued," driving major U.S. firms, including Nvidia, to plummet overnight. "Investor sentiment, which has recently been fueled by artificial intelligence momentum, is now shaking," said Lee Kyoung-min, a researcher at Daishin Securities, noting Powell's remark has triggered the downward push.
Tech shares traded mixed, with top cap Samsung Electronics rising 0.83 percent to 85,400 won while No. 2 chipmaker SK hynix slid 0.97 percent to 357,500 won. Financial companies closed bearish as well, with KB Financial losing 0.09 percent to 115,300 won and Shinhan Financial decreasing 1.14 percent to 69,100 won.
Defense shares sharply gathered ground following U.S. President Donald Trump's hawkish remarks against Russia, with Hanwha Aerospace jumping 5.38 percent to 1,058,000 won. Pharmaceutical companies were mixed, with Samsung Biologics rising 0.97 percent to 1,046,000 won while Celltrion plunged 3.96 percent to 176,900 won.
The local currency was quoted at 1,397.5 won against the greenback at 3:30 p.m., down 4.9 won from the previous session. Bond prices, which move inversely to yields, closed lower. The yield on three-year Treasurys rose 2.9 basis points to 2.489 percent, and the return on the benchmark five-year government bonds added 3.1 basis points to 2.629 percent.