South Korean stocks started sharply lower Thursday as higher-than-expected U.S. inflation data poured cold water on investors’ hopes for early rate cuts.

The benchmark Korea Composite Stock Price Index plunged 39.34 points, or 1.45 percent, to 2,665.82 in the first 15 minutes of trading.

Overnight, major U.S. indexes lost ground as the release of a key measure of inflation dashed investors’ hopes that the Federal Reserve may start cutting its rates soon.

The U.S.’ consumer price index (CPI) for March, which excludes food and energy costs, increased 0.4 percent from February, more than the 0.3 percent rise forecasts, showing that inflation is still hot.

After the release of the CPI report, many economists pulled back expectations the Fed will start cutting its rates in June.

In Seoul, most big-cap shares kicked off in negative territory.

Market bellwether Samsung Electronics dipped 0.84 percent, while No. 2 chipmaker SK hynix was flat.

Top automaker Hyundai Motor lost 1.32 percent, and its smaller affil
iate Kia dropped 1.11 percent.

Bio giant Samsung Biologics slid 2.24 percent, and Celltrion retreated 1.54 percent.

IT and financial shares took a big blow.

Internet operator Naver went down 2.38 percent, and Kakao, the operator of the country’s top mobile messenger, decreased 2.54 percent.

KB Financial Group, Shinhan Financial Group and Hana Financial Group dropped 4.78 percent, 3.44 percent and 4.13 percent, respectively.

Samsung CandT plummeted 6.63 percent.

But battery maker Samsung SDI gained 0.73 percent. Its rivals LG Energy Solution and POSCO Future M lost 1.74 percent and 0.71 percent, respectively.

The local currency was trading at 1,363.70 won against the dollar, down 8.80 won from the previous session’s close.

Source: Yonhap News Agency