Seoul Shares Close Higher Despite Hawkish Federal Reserve Signals

The benchmark Korea Composite Stock Price Index (KOSPI) closed up 31.14 points, or 0.46 percent, at 6,820.02 on Monday. The index erased early losses after opening 2.58 percent lower, bucking a trend of losses on Wall Street where the Dow Jones Industrial Average fell 0.02 percent and the Nasdaq Composite declined 0.52 percent. The rebound was led by tech stocks, with Samsung Electronics rising 1.17 percent to 260,000 won and SK hynix climbing 1.27 percent to 1.67 million won. Other gainers included LG Energy Solution, which advanced 2.16 percent, and Hyundai Motor, which gained 1 percent. Conversely, Hanwha Aerospace fell 4.75 percent and Korean Air shed 2.09 percent. The Korean won rose 3.9 won against the U.S. dollar to 1,368.6 won. Market volatility followed a speech by U.S. Federal Reserve Chair Kevin Warsh at the Jackson Hole symposium, in which he warned that inflation remains a concern and left the door open for further rate hikes. Investors also remained alert to escalating tensions in the Middle East following renewed U.S. strikes in the Strait of Hormuz. Institutions, foreign investors, and retail investors were all net sellers. While center leaning reports focused on the general rebound of tech stocks despite the hawkish Fed signals, center right reporting emphasized that the recovery was specifically driven by corporate share buybacks from Samsung Electronics and SK hynix, while also noting that a recent 0.25 percentage point rate hike by the Bank of Korea contributed to negative sentiment.