Kospi plunges 1.45% over U.S. inflation data

Stocks started sharply lower Thursday as higher-than-expected U.S. inflation data poured cold water on investors' hopes for early rate cuts.

A screen in Hana Bank's trading room in central Seoul shows the stock market prices as it opens on Thursday. [YONHAP]

Stocks started sharply lower Thursday as higher-than-expected U.S. inflation data poured cold water on investors' hopes for early rate cuts.

The Kospi plunged 39.34 points, or 1.45 percent, to 2,665.82 in the first 15 minutes of trading.

Overnight, major U.S. indexes lost ground as the release of a key measure of inflation dashed investors' hopes that the Federal Reserve may start cutting its rates soon.

The U.S. consumer price index (CPI) for March, which excludes food and energy costs, increased 0.4 percent from February, more than the 0.3 percent rise forecast, showing that inflation is still hot.

After the release of the CPI report, many economists pulled back expectations the Fed will start cutting its rates in June.

In Seoul, most big-cap shares kicked off in negative territory.

Samsung Electronics dipped 0.84 percent, while SK hynix was flat.

Hyundai Motor lost 1.32 percent, and Kia dropped 1.11 percent.

Samsung Biologics slid 2.24 percent and Celltrion retreated 1.54 percent.

IT and financial shares took a big blow.

Naver went down 2.38 percent, and Kakao decreased 2.54 percent.

KB Financial Group, Shinhan Financial Group and Hana Financial Group dropped 4.78 percent, 3.44 percent and 4.13 percent, respectively.

Samsung C&T plummeted 6.63 percent.

Samsung SDI gained 0.73 percent. LG Energy Solution and Posco Future M lost 1.74 percent and 0.71 percent, respectively.

The local currency was trading at 1,363.70 won against the dollar, up 8.80 won from the previous session's close.

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