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Seoul shares dive 1.7%

South Korean stocks sank 1.7 percent on Thursday as investors sold off tech and shipbuilder stocks following the recent rally, analysts said. The local currency lost ground against the U.S. dollar.

The benchmark KOSPI slumped 32.09 points to 1,860.58, ending a two-session gaining run. Trading volume was heavy at 496.5 million shares worth 8.3 trillion won ($7.73 billion), with gainers outnumbering losers 549 to 300.

The local currency finished at 1,074 won to the greenback, down 2.5 won from Wednesday’s close, on faltering appetite for risky assets, dealers said.

“The market has been unstable. The index gained some 100 points in just the two previous sessions. Investors took a breather following the recent climb,” said Yang Chang-ho, an analyst at Hyundai Securities Co.

The KOSPI rebounded to gain 99.36 points on Tuesday and Wednesday, after it was hardly affected by a downgrade of the U.S. credit rating earlier last week. At one point on Wednesday, it rose above the 1,900-point mark for the first time since it sank below the level on Aug. 8.

Foreigners and institutions increased their selling to lead the decline. Foreigners dumped a net 164 billion won worth of shares and institutions offloaded a net 312 billion won while retail investors snapped up a net 605 billion won.

U.S. stocks ended little changed in an up-and-down session due to lingering concerns that the U.S. economy may be headed for another recession and Europe may not be able to solve its financial problems.

“The South Korean stock market is vulnerable to offshore factors and the recent economic uncertainties made it more volatile,” said Yang.

Tech firms were the biggest losers particularly after massive foreign sell-offs, following the Google-Motorola takeover.

Electronic giant Samsung Electronics shed 5.72 percent to 709,000 won and its smaller rival LG Electronics dropped 6.11 percent to 58,400 won.

Shipbuilders ended in negative territory with Hyundai Heavy Industries, the world’s biggest shipyard, falling 6.45 percent to finish at 341,000 won.

Financials were bearish as Hana Financial Group, the country’s fourth-biggest banking group, dropped 1.88 percent to close at 34,000 won. Woori Finance Holdings Co., however, rose 0.41 percent to 12,150 won on reports that the sale of the state-run banking group fell through on a lack of bidders on Wednesday. 

(Yonhap News)
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