Profit-takers sell stock following Fed-fueled rallies

Stocks fell nearly 2 percent Friday, snapping a three-day winning streak as foreigners and institutions dumped shares after recent rallies fueled by hopes for a possible winding down of U.S. rate hikes. The won inched down against the dollar.

A screen in Hana Bank's trading room in central Seoul shows the Kospi closing at 2,434.33 points on Friday, down 45.51 points, or 1.84 percent, from the previous trading day. [YONHAP]

Stocks fell nearly 2 percent Friday, snapping a three-day winning streak as foreigners and institutions dumped shares after recent rallies fueled by hopes for a possible winding down of U.S. rate hikes. The local currency inched down against the dollar.

The Kospi retreated 45.51 points, or 1.84 percent, to 2,434.33. Trading volume was moderate at 462.1 million shares worth 7.2 trillion won ($5.53 billion), with decliners outnumbering gainers 604 to 262.

"It seems only a matter of time before we start to see more U.S. economic indexes showing signs of a slowdown," said Han Ji-young, an analyst at Kiwoom Securities.

"The Fed, of course, acknowledges this slowdown issue. Since core consumer prices and core personal spending have peaked, the Fed will adjust its speed in interest rate hikes in the December policy meeting," said Han.

Latest U.S. data showed manufacturing contracted last month for the first time in two and a half years, with a measurement of consumer spending having risen at a slower-than-expected pace in October, indications that the Fed's aggressive monetary tightening is cooling the economy.

Stocks rallied this week as Fed Chair Jerome Powell and other Fed policymakers suggested the central bank is heading for a slowing of rate hikes after four successive 75 basis-point increases to tame inflation.

Market watchers have priced in a 50 basis point increase by the Fed in December's monetary policy meeting.

In Seoul, foreigners and institutions unloaded holdings, selling off a net 403.3 billion won and 508.5 billion won respectively. Individual investors bought a net 908.7 billion won worth of stocks.

Stocks fell across the board. Samsung Electronics sank 3.5 percent to 60,400 won and SK hynix dipped 3.3 percent to 81,900 won.

Auto blue-chips Hyundai Motor and Kia lost 1.5 percent to 169,000 won and 3 percent to 66,500 won, respectively.

Cosmetics companies ended higher amid positive outlooks after China's lifting of a ban on Korean cultural exports. Amorepacific jumped 2.7 percent to 131,500 won and LG Household & Health Care shot up 3.7 percent to 670,000 won.

The won ended at 1,299.90 won against the dollar, up 0.20 won from Thursday's close.

BY LIM JEONG-WON, YONHAP [lim.jeongwon@joongang.co.kr]