US Tightening Pushes Exchange Rate Close to 1200 Won... Growth Stocks Continue to Decline

On the 5th, dealers were working in the dealing room of Hana Bank in Euljiro, Seoul. On that day, the KOSPI index opened at 2,984.05, down 5.19 points (0.17%) from the previous session. The won-dollar exchange rate started at 1,197.0 won, up 2.9 won. Photo by Moon Honam munonam@

[Asia Economy Reporter Junho Hwang] On the 5th, the stock market is showing a downward trend due to the acceleration of the US tightening pace. In particular, growth stocks that had driven the market's rise have plummeted as the won-dollar exchange rate surged close to 1,200 won.

As of 14:12 on the 5th, the decline in growth stocks stands out in the stock market. Kakao recorded 106,000 won, down 4.93%. This is the first time since the 5th (4.72%) that it has shown a decline in the 4% range. NAVER, in the same internet service sector, is also down 3.28%. Wemade, which had seen its stock price rise since the end of last year due to themes like Metaverse and NFT (Non-Fungible Token), is trading at 157,100 won, down 7.15%. HYBE recorded 314,000 won, down 6.96%.

The decline in growth stocks on this day is analyzed as a reaction to changes in monetary policy, such as the Federal Reserve (Fed) beginning to explore ways to tighten monetary policy by reducing its holdings, as reported by the US Wall Street Journal (WSJ) on the 4th (local time). The US stock market also closed lower the previous day.

Along with the acceleration of US tightening, a dollar strength phenomenon is also occurring. At this time, the won-dollar exchange rate is trading at 1,198.90 won, up 0.40%. The strong dollar acts as a factor restricting foreign inflows. Foreign investors are currently net selling 186.8 billion won.

In the early morning of the 6th, the minutes of the Federal Open Market Committee (FOMC) regular meeting held in December last year will also be released. At that time, Fed officials decided to speed up the tapering of asset purchases and complete tapering by March this year.

Han Ji-young, a researcher at Kiwoom Securities, said, "The process of liquidating spot positions that had flowed in as dividend arbitrage at the end of the year is also underway," adding, "Although risk management is necessary as it is a difficult period in the short term, the current level of selling appears to be excessively oversold."

This content was produced with the assistance of AI translation services.