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Seoul shares close 0.78 pct lower on FOMC woes

Seoul shares close 0.78 pct lower on FOMC woes

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Published : 2013-12-11 15:53
Updated : 2013-12-11 15:53

South Korean stocks closed 0.78 percent lower Wednesday as investors took a breather ahead of the U.S. monetary policy meeting scheduled for next week, analysts said. The local currency inched up against the U.S. dollar to set a year-high level.

The benchmark Korea Composite Stock Price Index (KOSPI) shed 15.48 points to 1,977.97. Trading volume was low at 228.1 million shares worth 3.42 trillion won ($3.26 billion) with losers outpacing gainers 541 to 261.

Analysts noted the U.S. policy-setting Federal Open Market Committee (FOMC) meeting slated for Dec. 17-18, which could give a better idea of when the central bank will commence tapering of economic stimulus moves.

"Investors mostly took a wait-and-see approach a week ahead of the FOMC meeting," said Park Sung-hun, an analyst at Woori Investment & Securities Co.

"While the U.S. stock market lost upward momentum, the trading volume on the local stock market also remained low," Park added.

Monetary easing moves by an advanced country usually cause investors to set their sights on riskier emerging markets, while a reduction leads them to relocate their investments.

Foreigners offloaded 219.6 billion won worth of Seoul shares on the main bourse. In contrast, individual investors and institutions scooped up a net 105.9 billion won and 105.7 billion won, respectively.

Shipbuilders closed bearish, with Hyundai Heavy Industries moving down 1.94 percent to 253,000 won and Samsung Heavy Industries losing 3.03 percent to 36,800 won. Daewoo Shipbuilding & Marine Engineering shed 2.05 percent to 33,500 won.

Builders also lost ground, with Hyundai Engineering & Construction falling 1.11 percent to 62,200 won and Daewoo Engineering & Construction decreasing 2.2 percent to 8,000 won. GS Engineering & Construction shed 1.55 percent to 28,500 won.

Market behemoth Samsung Electronics lost 1.39 percent to 1,420,000 won, while other tech blue chips closed higher, with top chipmaker SK hynix adding 0.82 percent to 36,800 won and LG Electronics climbing 1.04 percent to 68,300 won.

Mobile carriers also traded mixed, with top player SK Telecom closing unchanged from the previous trading session, while its smaller rival KT advanced 2 percent to 30,550 won. LG Uplus, the smallest player, added 5.46 percent to 10,050 won.

The local currency ended at 1,052.10 won to the U.S. dollar, up 0.1 won from Tuesday's close, due mainly to reduced concerns over the Fed's tapering, dealers said. The won has been setting new year-highs since Monday.

Market watchers said South Korea's foreign exchange authorities may intervene in the currency market soon to curb the won's gain as the its strength would eat into the country's exports.

Finance Minister Hyun Oh-seok said Tuesday that it is "necessary to take a closer look into the market," citing the latest rise of the Korean won against the greenback.

Despite the verbal suggestions, however, the local currency continued to trade higher against the U.S. dollar as investors continued to set sights on risky assets amid a delayed tapering of the quantitative easing by the Fed. (Yonhap News)

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