Kospi loses 1.56% ahead of key U.S. inflation data release

The Kospi fell 41.86 points, or 1.56 percent, to close at 2,635.44 as investors sought safety ahead of the release of key U.S. economic data.

A screen in Hana Bank's trading room in central Seoul shows the Kospi closing at 2,635.44 points on Thursday, down 1.56 percent, or 41.86 points, from the previous trading session. [YONHAP]

Shares dropped for the third consecutive session on Thursday ahead of key U.S. inflation data. The won's value against the dollar dipped to the lowest in a month.

The Kospi fell 41.86 points, or 1.56 percent, to close at 2,635.44. The Kosdaq fell 6.46 points, or 0.77 percent, to close at 831.99.

Trade volume was moderate at 366.42 million shares worth 10.92 trillion won ($7.9 billion), with losers far outpacing gainers 680 to 197.

Overnight, the Dow Jones Industrial Average dropped 1.06 percent to 38,441.54 points, and the tech-heavy Nasdaq composite retreated 0.58 percent to 16,920.58.

Institutions and foreigners sold a combined 1.23 trillion won, offsetting individuals' stock purchases valued at 1.19 trillion won.

Investors remained cautious as the United States is set to release April's core Personal Consumption Expenditures (PCE) price index Friday, local time. Earlier data showed that the U.S. economy has expanded at a modest pace since April, lowering the chances of an early rate cut.

In Seoul, most large-cap stocks declined.

Samsung Electronics fell 2.3 percent to 73,500 won and SK hynix declined 3.4 percent to 195,700 won.

Auto shares finished bearish, with Hyundai Motor dropping 1.5 percent to 257,000 won and Kia down 3.5 percent to 117,700 won.

IT shares finished lower as well. Naver slid 2.8 percent to 170,400 won and Kakao lost 0.23 percent to 43,650 won.

LG Energy Solution shed 4.1 percent to 328,000 won, and Korean Air slipped 1.2 percent to 20,400 won.

LG Chem shot down 5.4 percent to 350,000 won.

Among gainers, Amorepacific rose 0.9 percent to 188,000 won, SK Innovation climbed 0.1 percent to 102,200 won, and Hybe gained 2.4 percent to 204,000 won.

The local currency ended at 1,379.40 won against the greenback, up 14.4 won from the previous session's close for the lowest exchange rate since April 30, when the won ended at 1,389.40.

Bond prices, which move inversely to yields, closed lower. The yield on three-year government bonds rose 1.2 basis points to 3.439 percent, and the return on the benchmark U.S. 10-year government bonds added 6.2 basis points to 4.615 percent.

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