[Featured Stocks] How Far Will Game Stocks Fall... All Blue Lights Including Kakao Games

[Asia Economy Reporter Lee Seon-ae] On the 22nd, gaming stocks experienced significant declines. Gaming stocks, which are typically classified as representative growth stocks, are collapsing one after another, recording new lows due to the impact of the US interest rate hike.

At 9:53 AM on the same day, Kakao Games was trading down 2.95% at 44,450 KRW. During the session, it fell to 44,350 KRW, setting a new low. Besides Kakao Games, most gaming stocks are showing red. Krafton is down 3.38% at 214,500 KRW. Com2uS, JoyCity, Neptune, Playwith, and Dragonfly are all showing declines in the 2% range.

Typically, growth stocks are valued based on future cash flows, so interest rate hikes act as a negative factor for stock prices. This is because concerns arise that the company's future financing costs may increase as interest rates rise. The impact of the US Federal Reserve's (Fed) third consecutive giant step (a 0.75 percentage point increase in the benchmark interest rate at once) is significant. On the 21st (local time), the Fed announced after the Federal Open Market Committee (FOMC) regular meeting that it would raise the benchmark interest rate by 0.75 percentage points. Accordingly, the current benchmark interest rate of 2.25?2.50% was raised to 3.00?3.25%. As inflation proved difficult to control, the Fed took the unusual step of implementing three consecutive giant steps. At the same time, the US benchmark interest rate once again surpassed Korea’s, causing the benchmark interest rate inversion phenomenon to reoccur.

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