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Seoul shares close 0.51 pct lower on U.S. woes

Seoul shares close 0.51 pct lower on U.S. woes

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

South Korean stocks closed 0.51 percent lower Thursday as investors stayed on the sidelines amid looming concerns that the United States may commence the tapering of its economic stimulus, analysts said. The local currency gained against the U.S. dollar.

The benchmark Korea Composite Stock Price Index (KOSPI) shed 10.04 points to 1,967.93. Trading volume was low at 234.4 million shares worth 3.86 trillion won ($3.66 billion) with losers outpacing gainers 418 to 372.

Analysts said Seoul shares closed lower amid rising concerns that the U.S. policy-setting Federal Open Market Committee (FOMC) meeting slated for Dec. 17-18 may come up with detailed plans for reducing the country's economic stimulus.

The outlook came as the U.S. Democratic and Republican parties reached an agreement over the country's budget plans for fiscal 2014, a positive progress that may induce the Federal Reserve to start the tapering sooner than expected.

"Chances of the FOMC commencing its tapering of quantitative easing is 50 percent," said Lee Sang-jae, a researcher at Hyundai Securities Co. "Even if the tapering does not happen in December, Fed chairman Ben Bernanke may still provide details of an earlier-than-expected reduction plan."

Foreigners offloaded 696.8 billion won worth of Seoul shares on the main bourse. In contrast, individual investors and institutions scooped up a net 304.1 billion won and 364 billion won, respectively.

Tech shares closed bearish, with Samsung Electronics slipping 0.7 percent to 1.41 million won and top chipmaker SK hynix decreasing 0.95 percent to 36,450 won. Flat panel maker LG Display moved down 2.03 percent to 24,100 won.

Builders also lost ground, with Hyundai Engineering & Construction falling 1.45 percent to 61,300 won and Daewoo Engineering & Construction moving down 1.25 percent to 7,900 won. Daelim Industrial shed 2.47 percent to 91,000 won.

Financial firms also traded lower, with Shinhan Financial decreasing 0.33 percent to 44,900 won, and Samsung Life Insurance losing 1.44 percent to 96,100 won. Hana Financial shed 1.74 percent to 39,450 won.

The local currency ended at 1,051.00 won to the U.S. dollar, up 1.10 won from Wednesday'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 the decline, however, was limited amid the outlook that South Korea's foreign exchange authorities may intervene in the currency market soon to curb the won's gain, as its strength would eat into the country's exports. (Yonhap News)

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