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Seoul shares close down 1.59% on European debt woes

South Korean stocks finished 1.59 percent lower on Wednesday as investor sentiment was muted by the persistent debt crisis in Europe, analysts said. The local currency fell against the U.S. dollar.

The benchmark Korea Composite Stock Price Index fell 30.05 points to close at 1,856.07. Trading volume was moderate at 402 million shares worth 5.58 trillion won ($4.91 billion) with losers outpacing gainers 631 to 190.

“Concerns about Italy’s and Spain’s government bonds weighed on the market,” said analyst Lee Yong-won from HMC Securities Co.

“Despite overnight rallies on Wall Street, South Korean stocks are heavily affected by the European crisis.”

The KOSPI opened some 12 points higher as U.S. stocks closed higher on stronger-than-expected sales data for October, but soon swerved into the negative territory as the market was weighed down by lingering European debt concerns.

Italian benchmark bond yields closed above 7 percent, with Spanish and French yields also higher, raising worries about the countries’ ability to manage debts.

“Investors think that the European crisis will not be solved easily, so they are reluctant to invest in stocks,” Lee said.

Foreigners turned to net buyers, scooping up a net 97.8 billion won, while institutional investors sold a net 78.4 billion won.

Large-cap shares lost ground across the board, led by techs, banks and shipbuilders.

Market bellwether Samsung Electronics dropped 2.11 percent to 975,000 won and its smaller rival LG Electronics lost 1.49 percent to close at 66,000 won.

Chip giant Hynix Semiconductor, however, rose 1.36 percent to 22,350 won ahead of its stake sale to top mobile carrier SK Telecom, which lost 1.02 percent to close at 145,500 won.

Financials were among the biggest losers, with Hana Financial Group sliding 3.74 percent to 34,750 won and Woori Finance Holdings sinking 3.1 percent to finish at 9,690 won.

Leading shipyard Hyundai Heavy Industries shed 2.12 percent to 277,500 won and Daewoo Shipbuilding & Marine Construction ended 2.31 percent down to 25,350 won.

The local currency closed at 1,136.6 won to the greenback, down 10.5 won from Tuesday’s close, as foreign investors bought the U.S. dollar after unloading local stocks, dealers said. 

(Yonhap News)