The benchmark Kospi hit a 17-month low on Tuesday on persistent market concerns over runaway inflation and sluggish growth despite President Yoon Suk-yeol’s optimistic economic outlook at his inauguration.

The Kospi closed at 2596.56, the lowest level since Nov. 30, 2020, when it reached 2,591.34. Global efforts to tighten monetary policy, which the US kicked off last week with its biggest rate hike in 22 years to set the range between 0.75 percent and 1 percent, unsettled investors.

A foreign sell-off, which amounted to 317.6 billion won ($248.8 million), led the dip. Retail investors and institutions were net buyers, purchasing shares worth 285 billion won and 7.5 billion won, respectively.

Monday’s Wall Street dip on worries over a US rate hike weighing on economic activity sent investors on a selling spree, analysts said. They added that the impact of a prolonged slowdown in China, which could have substantial global spillovers, were factors as well. Beijing is enforcing a strict city-wide COVID-19 lockdown.

“Investors have doubts over whether the US Fed could really curb inflation,” said Lee Kyung-min, an analyst at Daishin Securities.

Major tech and internet stocks, like Samsung Electronics, LG Energy Solution and Kakao, saw shares slide along with banking shares. Meanwhile, telecom, food and beverage stocks gained a little.

Seo Sang-young, an analyst at Mirae Asset Securities, said the Kospi would soon find room to make a rebound.

“The impact (from the US markets) won’t be long and we should look at the US inflation data coming out soon,” Seo said referring to the US consumer price index, describing it as a gauge of economic activity to come as the US Fed starts its balance sheet reduction to curb prices.

The Bank of Korea, which raised interest rates twice in January and April, is expected to raise borrowing costs at least three more times starting as early as May, in response to US rate hikes to come this year and to fight soaring inflation here.

Consumer prices jumped 4.8 percent on-year in April, the highest gain in 13 years since October 2008. The rise was above a 2 percent inflation target the central bank set.

But the Yoon government is facing criticism for its lack of a coherent economic plan as it prepares to unveil an extra budget this week to support the self-employed and small businesses hit hardest by the pandemic.

Yoon’s pandemic relief package, worth at least 33 trillion won, involves one-off cash payouts. The package could far exceed the previous Moon government’s cumulative 35 trillion won in relief given out over the last two years, as the Yoon government could be forced to back another extra relief budget.

Yoon’s office has said little on balancing easing inflation and deploying cash.