Stocks slide after Fed takes rate cuts off the table

Stocks slid as the Fed signaled that it would not cut interest rates in the near future. The won gained slight ground against the dollar.

Screens in Hana Bank's trading room in central Seoul show the Kospi closing at 2,576.20 points on Tuesday, down 0.58 percent, or 15.11 points, from the previous trading session. [YONHAP]

Shares closed lower for a second consecutive day Tuesday amid U.S. rate woes prompted by the Federal Reserve chair. The local currency gained slight ground against the dollar.

The Kospi lost 15.11 points, or 0.58 percent, to close at 2,576.20.

Trade volume was heavy at 404.4 million shares worth 10.1 trillion won ($7.6 billion), with losers outnumbering gainers 613 to 265.

Foreign investors scooped up a net 338.1 billion won worth of shares, while institutions offloaded 233.3 billion won. Retail investors dumped a net 125.2 billion won.

“With institutions selling two straight days, the stocks descended on Tuesday. However, with the foreigners buying persisting, a further dip is being prevented,” said Lee Kyung-min, a researcher from Daishin Securities.

The Kospi saw extended losses after opening lower, tracking overnight losses on Wall Street caused by U.S. Fed Chairman Jerome Powell's suggestion that the bank would not cut interest rates in the near future.

The medical and pharmaceutical sectors saw gains. Electric and gas shares and logistics shares rose. Shares of finance and insurance companies fell, as did those for the transportation sector.

Large caps closed mixed.

Samsung Electronics added 0.13 percent to 74,400 won, with SK hynix, surging 4.31 percent to 138,000 won.

LG Energy Solution tumbled 3.08 percent to 377,000 won, while LG Chem shed 0.96 percent to 462,500 won.

Hyundai Motor lost 1.05 percent to 235,500 won, with its affiliate Kia plunged 5.66 percent to 111,600 won.

The local currency closed at 1,327.60 won against the greenback, down 3.20 won from the previous session's close.

The Kosdaq lost 0.96 points to close at 807.03.

Paper and lumber shares soared on the exchange, as did those of broadcasting services, semiconductors and chemicals. Finance and transportation shares fell.

Retail investors bought a net 192.3 billion won, while institutions and foreigners offloaded 125.9 billion and 29.6 billion won, respectively.

Bond prices, which move inversely to yields, closed mixed. The yield on three-year government bonds lost 2.2 basis points to 3.290 percent, and the return on the benchmark U.S. 10-year government bonds rose 13.9 basis points to 4.160 percent.

BY LEE SOO-JUNG, YONHAP [lee.soojung1@joongang.co.kr]