Seoul Stocks Stumble as U.S. Inflation Data Dashes Rate Cut Hopes

Seoul shares closed lower Wednesday as weaker-than-expected US inflation data prompted investors to trim their bets on the Federal Reserve’s rate cuts. The Korean won fell against the US dollar.

The benchmark Korea Composite Stock Price Index (KOSPI) dropped 28.9 points, or 0.9 percent, ending the day at 3,186.38.

Trading was moderate, with 525.37 million shares changing hands, valued at 11.09 trillion KRW (approximately $8 billion). Stocks in decline outnumbered those advancing by a ratio of 704 to 189.

Institutional investors sold a net 552.8 billion KRW worth of stocks, offsetting net purchases by foreign and individual investors of 26.79 billion KRW and 429.99 billion KRW, respectively.

US inflation rose 2.7 percent in June, falling short of market expectations, even as companies began passing some tariff-related costs on to consumers.

Analysts noted that alongside the disappointing inflation data, President Donald Trump’s latest tariff threats continued to weigh on investor sentiment.

However, Nvidia Corporation’s planned resumption of H20 AI chip sales to China boosted demand for semiconductor stocks, helping to limit losses on the KOSPI, according to Hwang Joon-ho, an analyst at Sangsangin Investment & Securities Co.

In Seoul, performance among large-cap stocks was mixed.

Market heavyweight Samsung Electronics rose 1.57 percent to 64,700 KRW, while chip manufacturer SK hynix fell 0.84 percent to 296,000 KRW.

Defense contractor Hanwha Aerospace climbed 0.71 percent to 854,000 KRW, and leading shipbuilder HD Hyundai Heavy Industries gained 1.77 percent to 401,500 KRW.

Among the decliners, automotive giant Hyundai Motor dropped 1.66 percent to 207,500 KRW, and battery maker LG Energy Solution fell 1.74 percent to 311,000 KRW.

The Korean won closed at 1,385.70 against the US dollar at 3:30 p.m., down 5.5 won from the previous session.

Bond prices, which move inversely to yields, closed higher. The yield on three-year Treasury bonds fell 0.4 basis points to 2.459 percent, while the return on benchmark five-year government bonds declined 0.2 basis points to 2.642 percent. (Yonhap)