Seoul shares open sharply lower on Fed chief's hawkish comments

SEOUL, Aug. 31 (Yonhap) -- Korean stocks experienced a sharp decline on Monday, mirroring losses witnessed on Wall Street, as a result of potential rate hikes by the U.S. Federal Reserve. This was largely influenced by hawkish remarks made by its chief, Kevin Warsh, during his inaugural major speech as Federal Reserve Chair. The Korea Composite Stock Price Index (KOSPI) initially tumbled 2.58 percent, subsequently recovering to a decline of 2.41 percent, or 163.60 points, settling at 6,625.28 at 9:15 a.m. local time.

The U.S. stock market also felt the impact of Warsh's comments. The Dow Jones Industrial Average experienced a negligible decline of 0.02 percent, while the tech-focused Nasdaq Composite saw a steeper drop of 0.52 percent. During his address, Warsh cautioned that inflation remains a concern, hinting that further interest rate hikes might be on the table at the annual Jackson Hole symposium in Wyoming on Friday.

Several key South Korean companies felt the impact of the market downturn. Samsung Electronics, a major player in the tech sector, saw its shares drop by 2.53 percent, while its chip manufacturing competitor, SK hynix, declined by 2.18 percent. Hyundai Motor, a leading automobile manufacturer, recorded a decline of 0.88 percent, and Hanwha Aerospace, a defense contractor, faced a minor setback of 0.09 percent.

On the brighter side, POSCO Holdings, a prominent steelmaker, managed to gain 0.15 percent, and SK Innovation, a leading oil refiner, posted a significant gain of 5.99 percent. The Korean won was traded at 1,377.70 per U.S. dollar, up 1.8 won from the previous day's closing session.