Shares drop to lowest point in over seven months on Fed concerns

Shares dropped by more than 1 percent to the lowest point in over seven months Friday amid woes over the U.S. Federal Reserve's further monetary tightening. The local currency rose against the dollar.

Screens in Hana Bank's trading room in central Seoul show the Kospi closing at 2,375.00 points on Friday, down 1.69 percent, or 40.80 points, from the previous trading session. [YONHAP]

Shares dropped by more than 1 percent to the lowest point in over seven months Friday amid woes over the U.S. Federal Reserve's further monetary tightening. The local currency rose against the dollar.

The Kospi lost 40.8 points, or 1.69 percent, to close at 2,375, marking the lowest level since March 14, when the Kospi finished at 2,348.97.

Trading volume was slim at 507.2 million shares worth 8.8 trillion won ($6.5 billion), with decliners beating gainers 757 to 135.

In a speech delivered at a discussion session in New York on Thursday, Federal Reserve Chairman Jerome Powell said inflation is still "too high," leaving the door open for another interest rate hike.

"Powell's statement and a spike in longer-term bond yields weighed heavily on investor sentiment," said Lee Kyung-min, an analyst at Daishin Securities.

In Seoul, tech and battery stocks led the market decline.

Samsung Electronics dropped 1.01 percent to 68,800 won, and LG Electronics fell 0.75 percent to 105,400 won.

Battery shares continued their bearish mode following Tesla's weaker-than-expected third-quarter earnings. LG Energy Solution and Posco Future M tumbled 3.54 percent and 5.66 percent to 436,500 won and 300,000 won, respectively.

Gamemakers were also in negative territory, with NCSoft falling 3.59 percent to 228,500 won and Netmarble dropping 2.98 percent to 37,500 won.

Korean Air Lines decreased 1.43 percent to 19,350 won, and Asian Airlines sank 2.63 percent to 9,640 won ahead of a key board meeting to sell the latter's cargo division for the two company's takeover deal.

Leading pharmaceutical firm Celltrion retreated 0.07 percent to 142,200 won after announcing a general shareholders meeting next week to make a decision on a planned merger with its sales affiliate Celltrion Healthcare.

The local currency ended at 1,352.4 won against the dollar, down 5 won from the previous session's close.

Bond prices, which move inversely to yields, closed mixed. The yield on three-year government bonds decreased 3.6 basic points to 4.04 percent, and the return on the benchmark U.S. 10-year government bond gained 8.8 basic points to 4.99 percent.

BY KIM JU-YEON, YONHAP [kim.juyeon2@joongang.co.kr]