Seoul Stocks Plunge Amid Inflation Worries, US Rate Hike Fears

Seoul stocks opened sharply lower on Friday morning, tracking losses in the US market, amid concerns over inflation. The benchmark Korea Composite Stock Price Index (KOSPI) plummeted 2.23 percent to 6,876.74 by 11:20 a.m., after opening 3.29 percent lower. Despite initial investor worries about a possible rate hike by the US Federal Reserve due to higher oil prices, retail buying helped narrow losses later in the morning.

Individuals purchased a net 1.68 trillion won ($1.24 billion) worth of stocks, offsetting the net sales of 1.04 trillion won and 1.31 trillion won by institutions and foreigners, respectively. Tech stocks led the decline, with market bellwether Samsung Electronics falling 4 percent, chipmaker SK hynix declining 3.45 percent, Hyundai Motor dropping 2.31 percent, and LG Energy Solution shedding 2.81 percent.

However, defense giant Hanwha Aerospace rose 0.75 percent, and state-run Korea Gas climbed 0.82 percent. The US producer price index rose 0.4 percent in August from a month earlier, while investors await Friday's consumer price report for clues about the Fed's future rate path.