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Stocks flat ahead of Jackson Hole Fed meeting

Aug 22,2019
Stocks closed slightly higher Wednesday amid the lack of any clear drivers while foreigners again turned to selling. The won continued to gain ground against the dollar.

The benchmark Kospi gained 4.40 points, or 0.22 percent, to close at 1,964.65. Trading volume was moderate at 382 million shares worth some 3.74 trillion won ($3.11 billion), with winners outnumbering losers 554 to 256.

Investors remained cautious ahead of the Jackson Hole Fed meeting, slated to be held from Thursday to Saturday, where Fed Chairman Jerome Powell is expected to offer a message suggesting the future direction of U.S. monetary policy.

“Korean stocks closed higher on hopes of U.S.-China trade negotiations. However, the rise stayed range-bound amid a clear wait-and-see attitude of investors ahead of the Jackson Hole Fed meeting and the release of the Federal Open Market Committee (FOMC) minutes,” Seo Sang-young, an analyst at Kiwoom Securities, said.

Normally, the minutes from the FOMC meeting are a barometer of the future direction of rate policy, but Samsung Futures analyst Jeon Seung-ji insisted the market will likely pay more attention to a message from Powell.

“The Fed is set to release the minutes from its latest Federal Open Market Committee minutes, but the market is paying more attention to whether there have been any changes to the perception of Chairman Powell since (the FOMC meeting) as there have been many changes in conditions, including additional U.S. tariffs on Chinese imports,” Jeon said.

The next FOMC meeting is set to be held from Sept. 17-18.

Foreign investors sold a net 129 billion won, one day after they ended a selling streak of 13 consecutive sessions to become net buyers. Individuals scooped up a net 102 billion won, while institutions purchased a net 5.7 billion won.

Large caps closed mixed.

Samsung Electronics added 0.11 percent to 44,500 won, but No. 2 chipmaker SK Hynix lost 0.79 percent to 75,800 won, with top automaker Hyundai Motor also shedding 0.79 percent to 125,500 won.

Top chemical maker LG Chem closed 1.23 percent higher at 328,000 won, while leading pharmaceutical company Celltrion advanced 0.97 percent to 156,500 won.

The secondary Kosdaq gained 8.95 points, or 1.47 percent, to close at 615.96.

The local currency closed at 1,202.45 won against the dollar, down 5.85 won.

BY KO JUN-TAE, YONHAP [ko.juntae@joongang.co.kr]