Tech loses, auto gains as investors await rate-setting meeting

Shares closed lower as investors awaited the U.S. Fed's rate-setting meeting. The Kospi lost 0.79 percent, and the local currency weakened against the dollar.

A screen in Hana Bank's trading room in central Seoul shows the Kospi closing at 2,701.17 points on Monday, down 0.79 percent, or 21.50 points, from the previous trading session. [YONHAP]

Shares closed lower Monday as investors took to the sidelines ahead of the U.S. Federal Reserve's rate-setting meeting later this week. The local currency sharply lost ground against the dollar.

The Kospi lost 21.5 points, or 0.79 percent, to close at 2,701.17. The Kosdaq fell 1.47 points, or 0.17 percent, to 864.71.

Trade volume was moderate at 499.3 million shares worth 11.16 trillion won ($8.1 billion) with losers outnumbering gainers 499 to 381.

Retail investors scooped up a net 553.8 billion worth of shares with foreigners purchasing a net 18.9 billion won. Institutions offloaded a net 567.9 billion won.

The Kospi had opened sharply lower, tracking Wall Street's losses on Friday caused by stronger-than-expected employment data that weakened hopes for a U.S. rate cut.

The U.S. Federal Reserve is set to hold its rate-setting meeting Tuesday and Wednesday (U.S. time).

“Short-term losses are inevitable this week amid a rise in bond rates and a strong U.S. dollar due to firm U.S. jobs data,” Daishin Securities analyst Lee Kyung-min said.

Most large caps finished in negative terrain.

Samsung Electronics plunged 2.07 percent to 75,700 won while SK hynix added 0.24 percent to 208,000 won.

Biochem shares also finished lower with LG Chem dropping 3.01 percent to 370,500 won and Celltrion retreating 0.84 percent to 189,500 won. Samsung Biologics slipped 1.87 percent to 736,000 won.

Battery makers also suffered heavy losses, with LG Energy Solution slipping 1.67 percent to 353,000 won and Samsung SDS plummeting 4.57 percent to 154,600 won.

Tech shares also ended lower with Naver falling 2.68 percent to 170,700 won and Kakao dropping 2.60 percent to 43,100 won.

Automakers gained ground. Hyundai Motor rose 0.94 percent to 267,500 won while Kia advanced 0.25 percent to 121,400 won.

The local currency closed at 1,376 won against the greenback, up 10.7 won from the previous session's close.

Bond prices, which move inversely to yields, closed mixed. The yield on three-year government bonds added 4.5 basis points to 3.353 percent, and the return on the benchmark U.S. 10-year government bonds rose 14.7 basis points to 4.435 percent.

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