South Korean stocks closed 2.74 percent lower Thursday as investor sentiment was chilled by nagging concerns about the eurozone sovereign crisis, analysts said. The local currency fell against the U.S. dollar.

The benchmark Korea Composite Stock Price Index declined 50.83 points to close at 1,805.09. Trading volume was moderate at 341.6 million shares worth 6.68 trillion won ($5.83 billion) with losers outpacing gainers 714 to 156.

“Foreign and institutional sell-offs led the KOSPI to extend its loss in late trading,” said Kwak Joong-bo, a market analyst at Samsung Securities Co.

Kwak said investor sentiment remained fragile on concerns about the eurozone debt crisis as France and Germany differed on how to increase the ammunition of a bailout fund in the region.

The KOSPI started higher, but earlier gains were reversed as foreign investors expanded their sell-offs of local stocks. Foreign investors dumped a net 106.5 billion won worth of local stocks on the main bourse.

Investor sentiment remained fragile on concerns that European leaders may lay out substantial measures to tackle the eurozone debt crisis at this weekend’s summit.

Bank shares were under heavy selling pressure on reports that the regulator is seeking to curb banks’ excessive dividend payouts.

Top banking group Woori Finance fell 4.27 percent to 10,100 won and its rival Shinhan Financial Group lost 3.86 percent to 42,300 won.

No. 4 banking group Hana Financial Group shed 4.79 percent to 35,800 won as it denied a local report that it has asked Lone Star Funds to further cut its sale price for Korea Exchange Bank.

Leading refiner SK Innovation lost 6.44 percent to 152,500 won and its rival S-Oil tumbled 9.05 percent to 100,500 won.

But market bellwether Samsung Electronics advanced 2.37 percent to 907,000 won on expectations of solid third-quarter earnings.

U.S. markets closed lower Wednesday on concerns that European leaders may lay out substantial measures to tackle the eurozone debt crisis at this weekend’s summit. The Dow Jones industrial average fell 0.63 percent and the tech-laden Nasdaq composite index lost 2.01 percent.

The local currency closed at 1,145 won to the greenback, down 13.1 won from Wednesday’s close as offshore investors scooped up local stocks, dealers said. The won rose 1.25 percent per the dollar on Wednesday as South Korea and Japan agreed to expand their currency swap line to $70 billion from $13 billion.
 
(Yonhap News)