(2nd LD) Seoul shares end lower on inflation fears

Seoul shares closed lower on Thursday as worries about inflation intensified due to a surge in oil prices triggered by Middle East tensions. The Korea Composite Stock Price Index (KOSPI) fell 17.72 points, or 0.25%, to 7,033.92. Trading volume was steady with 418.4 million shares valued at 28.19 trillion won, and there were more losers than gainers - 443 to 416. Foreign investors sold stocks worth 2.49 trillion won, while domestic investors bought stocks worth 461.46 billion won and 362.18 billion won, respectively.

Global markets were also impacted by the Middle East situation and rising oil costs. The U.S. Dow Jones Industrial Average slipped 0.77%, and the tech-focused Nasdaq Composite fell 0.64%. These declines reflect the anticipation of potential interest rate hikes by the U.S. Federal Reserve to tackle inflation, as investors eagerly await Friday's release of U.S. consumer price index (CPI) data.

Among the key losers, Samsung Electronics, a tech giant, dropped 0.19% to 269,000 won, while its rival SK hynix declined 0.16% to 1.85 million won. Battery manufacturer LG Energy Solution fell 1.62% to 385,000 won, and oil refiner SK Innovation fell 0.26% to 561,000 won. Conversely, Hyundai Motor, a leading automaker, rose 0.26% to 389,000 won, and defense firm Hanwha Aerospace increased 1.91% to 1.07 million won. The Korean won ended the day at 1,339.2 per U.S. dollar, a 3.1 won decline from the previous session's close.

Bond prices, which inversely correlate with yields, fell as the yield on three-year Treasurys rose 2 basis points to 3.930%, and the return on the five-year government bond increased 5 basis points to 4.186%.