FX.co ★ South Korea Shares Expected To Remain Under Pressure

The South Korean stock market has experienced declines for two consecutive sessions, dropping nearly 20 points or 0.7 percent. The KOSPI currently hovers just below the 2,725 mark and may continue its downward trend on Thursday.

The global outlook for the Asian markets is pessimistic, largely due to concerns over interest rates. Both European and U.S. markets experienced losses, setting the expectation for similar openings in Asia.

On Wednesday, the KOSPI closed marginally lower as losses in the financial, technology, and energy sectors were partially offset by gains in the automobile industry. The index slipped 0.72 points, or 0.03 percent, ending at 2,723.46. Trading volume reached 476 million shares valued at 12.1 trillion won, with 474 decliners and 402 gainers.

Key market movements included Shinhan Financial falling 2.15 percent, KB Financial decreasing 3.06 percent, and Hana Financial retreating 1.74 percent. Samsung Electronics dropped 0.89 percent, while Samsung SDI and LG Electronics fell 0.73 percent and 1.24 percent, respectively. Conversely, SK Hynix surged 2.97 percent, Lotte Chemical gained 2.64 percent, and Hyundai Motor soared 9.49 percent. Other notable performers were Kia Motors, which increased 3.93 percent, and Hyundai Mobis, which rose 2.91 percent.

Following a mixed performance early in the day, U.S. markets ended lower. The Dow Jones Industrial Average fell by 201.95 points, or 0.51 percent, closing at 39,671.04. The NASDAQ lost 31.08 points, or 0.18 percent, ending at 16,801.54, while the S&P 500 decreased by 14.40 points, or 0.27 percent, to close at 5,307.01.

Wall Street’s decline was driven by Federal Reserve minutes suggesting that officials might keep interest rates steady for longer than previously anticipated. The minutes from the April 30-May 1 meeting noted disappointing inflation readings in the first quarter and indicators of strong economic momentum. However, there was also discussion about potentially reducing policy restraint if labor market conditions unexpectedly weaken, as well as a willingness to raise rates further if inflation risks emerge.

Oil prices dropped to a two-month low on Wednesday after data indicated an unexpected increase in U.S. crude oil inventories last week. West Texas Intermediate crude oil futures for July declined by $1.09, or 1.4 percent, to settle at $77.57 per barrel.

Regionally, the Bank of Korea is set to conclude its monetary policy meeting this morning and is widely expected to maintain its benchmark lending rate at 3.50 percent.