(LEAD) Seoul shares retreat for 3rd day amid U.S. rate hike uncertainties, strong dollar

(ATTN: ADDS bond yields at bottom, photo)

SEOUL, Aug. 19 (Yonhap) -- Seoul shares declined for a third consecutive day Friday amid uncertainties over the U.S. Federal Reserve's future rate hikes. The Korean won dipped to a yearly low against the U.S. dollar.

The benchmark Korea Composite Stock Price Index (KOSPI) lost 15.36 points, or 0.61 percent, to close at 2,494.69 points. The Friday closing is down 1.39 percent from a week ago.

Trading volume was moderate at about 437 million shares worth some 6.6 trillion won (US$5 billion), with losers outnumbering gainers 587 to 263.

Institutions sold a net 202 billion won, and foreigners offloaded 90 billion won, while retail investors bought 273 billion won.

After a lackluster start, stocks increasingly lost ground in the face of overnight gains on Wall Street. The Fed's latest minutes hinted at a possible slowdown in inflation growth, but largely upheld its policy drive to tame the price pressure.

In July, the Fed raised its benchmark interest rate by 75 basis points for the second straight time to tame the high-flying inflation rates.

Speculations about higher interest rates also strengthened the U.S. dollar in the local currency market, driving investors' eyes off from the risky assets, including stocks.

"The dollar topped the year's highest 1,320 won mark, spurring foreign sell-offs," said Hyundai Motor Securities analyst Lee Jae-sun.

Market bellwether Samsung Electronics Co. fell 0.98 percent to 60,900 won, while No. 2 chipmaker SK hynix Inc. added 0.73 percent to 96,400 won.

Internet portal operator Naver lost 0.8 percent to 248,000 won, with its rival Kakao declining 3.16 percent to 76,700 won.

The local currency closed at 1,325.9 won against the U.S. dollar, down 5.2 won from the previous session's close.

Bond prices, which move inversely to yields, closed lower. The yield on three-year Treasurys added 7.2 basis points to 3.197 percent, and the return on the benchmark five-year government bond swelled 8.8 basis points to 3.276 percent.

jwc@yna.co.kr
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