On Wednesday, the South Korean stock market broke its two-day decline, where it had lost almost 40 points, or 1.4%. The KOSPI now sits just above the 2,480 mark. However, expectations suggest a downward shift on Thursday.
The global outlook for Asian markets points toward significant consolidation due to growing concerns over interest rates. European markets were mixed and relatively stable; however, U.S. exchanges experienced a steep drop, potentially influencing Asian markets to follow suit.
The KOSPI recorded a notable rise on Wednesday, driven by gains in financial stocks, technology shares, and automotive manufacturers. The index advanced 27.62 points, or 1.12%, to close at 2,484.43. It traded between a low of 2,462.82 and a high of 2,492.00, with a volume of 421.9 million shares valued at 6.9 trillion won. The market saw 582 stocks gain while 302 declined.
Among the active stocks, Shinhan Financial surged 2.77%, KB Financial rose 3.32%, and Hana Financial increased 2.57%. Samsung Electronics gained 1.29%, Samsung SDI climbed 4.45%, and LG Electronics soared 5.41%. Conversely, SK Hynix fell 0.27%. Naver strengthened by 1.43%, LG Chem increased by 1.17%, Lotte Chemical added 2.06%, and SK Innovation dipped slightly by 0.17%. POSCO Holdings advanced 1.70%, SK Telecom grew 1.05%, Hyundai Mobis shot up 5.22%, Hyundai Motor gained 4.84%, Kia Motors soared 6.37%, while KEPCO remained unchanged.
On Wall Street, the day ended disastrously. The major averages opened flat and remained steady most of the session before dramatically plummeting after the Federal Reserve's interest rate announcement. The Dow tumbled 1,123.03 points, or 2.58%, to 42,326.87. The NASDAQ dropped 716.37 points, or 3.56%, to 19,392.69, while the S&P 500 fell by 178.45 points, or 2.95%, to 5,872.16.
This market sell-off followed the Federal Reserve's anticipated decision to reduce interest rates by a quarter-point, but with fewer rate cuts expected next year than previously estimated. The announcement focused on the Fed's latest economic forecasts, suggesting that interest rates could range between 3.75% and 4.0% by the end of 2025, compared to the previous estimate of 3.25% to 3.50% from September. Assuming the Fed cuts rates by a quarter-point, projections indicate only two rate cuts next year, down from four, as inflation is expected to be higher in 2025 than initially anticipated.
Meanwhile, crude oil prices saw an uptick on Wednesday, recovering from recent declines. This rise followed data indicating a decrease in crude inventories and a rise in gasoline stockpiles last week. Specifically, West Texas Intermediate crude oil futures for January increased by $0.50, or 0.71%, closing at $70.58 per barrel.
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