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Seoul shares drop 1 pct on Fed stimulus tapering woes

Seoul shares drop 1 pct on Fed stimulus tapering woes

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Published : 2013-12-03 15:42
Updated : 2013-12-03 15:42

South Korean stocks sank more than 1 percent on Tuesday on concerns that the U.S. Federal Reserve may start reducing its stimulus measures earlier than expected on robust economic data, analysts said. The local currency gained against the U.S. dollar.

The benchmark Korea Composite Stock Price Index (KOSPI) shed 21.42 points, or 1.05 percent, to 2,009.36. Trading volume was low at 290 million shares worth 3.59 trillion won ($3.38 billion) with losers outpacing gainers 223 to 588.

Analysts said the local stock market lost ground as November factory activity survey and October construction spending in the U.S. revived speculation that the Fed may soon scale back its stimulus.

"Stronger than expected U.S. data, combined with a weak Japanese currency, weighed investor sentiment here," said Cho Byun-hyun, an analyst at Tong Yang Securities. "A string of data coming this week may further bolster expectations over the U.S. Fed's earlier winding down of stimulus," he said.

Foreigners sold a net 66.1 billion won worth of Seoul shares on the main bourse, and institutional investors offloaded a net 155 billion won. In contrast, individuals purchased a net 229 billion won.

Tech and autos led the overall market decline, with major market heavy weights closing in the negative terrain.

Samsung Electronics lost 0.41 percent to close at 146,000 won, and its smaller rival LG Electronics fell 1.62 percent to end at 66,900 won. SK hynix also sank 2.8 percent to close at 34,700 won.

Automakers slipped into the negative territory as well on concerns that a weaker Japanese yen hurt their competitiveness, with industry leader Hyundai Motor dropping 4.21 percent to 239,000 won and its smaller affiliate Kia Motors sinking 5.2 percent to 56,500 won.

The local currency ended at 1,061.20 won to the U.S. dollar, down 4 won from Monday's close, as exporters offloaded the local currency to buy the greenback, dealers said. (Yonhap News)

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