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Seoul shares down 0.22 pct despite ECB rate cut

South Korean stocks closed 0.22 percent lower Monday despite the European Central Bank's (ECB) stimulus measure as investors were at odds over its impact on the global economy down the road, analysts said. The local currency gained against the U.S. dollar.
The benchmark Korea Composite Stock Price Index (KOSPI) shed 4.23 points to finish at 1,961.48. Trading volume was low at 291.7 million shares worth 3.9 trillion won (US$3.56 billion) with gainers outnumbering decliners 447 to 356.
"Seoul shares traded lower despite the ECB slashing its benchmark rate to add more liquidity to the market, as investors took a wait-and-see approach on its impact," said Kang Hyun-gie, a researcher at I'M Investment & Securities Co.
The ECB cut its benchmark rate by a quarter percentage point to 0.5 percent earlier this week, adding to hopes for an economic stimulus in Europe.
Market watchers earlier predicted that foreigners will scoop up local shares following the move, as European investors have gone on buying sprees on the Seoul bourse for months in the past when the ECB has lowered its rates.
"Investors also still remain dubious on the economic recovery of South Korea down the road, as the country lacks growth momentum," Kang added.
Foreigners net-sold shares worth 57.3 billion won, and institutional investors offloaded a net 26.2 billion won. In contrast, individuals scooped up more shares than they sold at 97.1 billion won.
Namyang Dairy Products Co., a local manufacturer of milk powder products, shed 2.02 percent to 1,117,000 won after media reports that the firm took advantage of its retailers with unlawful acts.
Affiliates of cash-strapped STX Group finished bearish, with STX Pan Ocean moving down 1.96 percent to 3,250 won and STX Engine losing 2 percent to 4,410 won. STX Offshore & Shipbuilding decreased 2.09 percent to 3,980 won.
Mobile carriers also lost ground, with No. 1 player SK Telecom falling 2.36 percent to 206,500 won and KT losing 1.16 percent to 38,300 won. LG Uplus, the smallest player, shed 2.12 percent to 11,550 won.
In contrast, Hotel Shilla gained 5.01 percent to 58,700 won on reports that the firm acquired shares in Dongwha Duty Free to forge stronger business ties with the smaller company.
Builders closed higher, with No. 1 player Hyundai Engineering & Construction climbing 3.16 percent to 58,700 won and Daewoo Engineering & Construction adding 1.6 percent to 7,610 won.
Tech shares closed mixed, with market behemoth Samsung Electronics falling 1.37 percent to 1,514,000 won, while its smaller affiliate LG Electronics moved up 0.59 percent to 85,300 won.
The local currency ended at 1,094.50 won against the greenback, up 2.60 won from Friday's close, as investors sought after riskier assets amid the improved outlook over the U.S. economy, dealers said. (Yonhap News)

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