Stocks drop for a third day after central bank ups rates

Stocks closed lower tfor a third day Thursday as the country's central bank raised its key policy rate to fight inflation and household debt.

A screen at Hana Bank's trading room in central Seoul shows the Kospi closing at 2,980.27 points on Thursday, down 14.02 points, or 0.47 percent, from the previous trading day. [NEWS1]

Stocks closed lower for a third day Thursday as the country's central bank raised its key policy rate to fight inflation and household debt.

The benchmark Kospi retreated 14.02 points, or 0.47 percent, to close at 2,980.27 points.

Trading volume was moderate at about 587 million shares worth some 9.3 trillion won ($7.8 billion), with losers outnumbering gainers 642 to 228.

Foreigners and institutions offloaded a net 94.5 billion won and 149.3 billion won, respectively, while retail investors scooped up 202.3 billion won.

The Kospi got off to a weak start after minutes of the Federal Open Market Committee (FOMC)'s latest meeting showed a much more hawkish stance.

Also, the Bank of Korea raised the benchmark seven-day repo rate by 0.25 percentage point to 1 percent and revised up its consumer inflation outlook for this year.

"Macro events such as the FOMC minutes hinting hawkish content and the central bank's decision to raise the rate act as downward pressure to the market," Kiwoom Securities analyst Kim Sae-hun said.

Most tech heavyweights traded lower.

Samsung Electronics slumped 1.47 percent to 73,700 won, and chipmaker SK hynix decreased 1.67 percent to 117,500 won.

Internet portal operator Naver went up 0.51 percent to 397,000 won, and Kakao jumped 2.81 percent to 128,000 won.

Kakao Bank went up 4.95 percent to 67,900 won, and payment service Kakao Pay skyrocketed 18.31 percent to a record high of 216,500 won.

Pharmaceutical firm Samsung Biologics edged down 0.24 percent to 847,000 won, and Celltrion fell 0.95 percent to 209,000 won.

Game publisher NCSoft dropped 1.41 percent to 700,000 won, and Netmarble rose 0.82 percent to 123,000 won.

The Kosdaq lost 4.47 points, or 0.44 percent, to close at 1,015.66.

The local currency closed at 1,190.2 won against the dollar, up 3.7 won from the previous session's close.

Bond prices, which move inversely to yields, closed mixed. The yield on three-year government bonds added 5.3 basis points to 2.017 percent, and the yield on the benchmark 10-year government bond fell 4.1 basis points to 1.54 percent.

BY LEE TAE-HEE, YONHAP [lee.taehee2@joongang.co.kr]