Seoul shares close lower on blue-chip losses

By Korea Herald
  • Published : Jan 9, 2014 - 16:41
  • Updated : Jan 9, 2014 - 16:41
South Korean stocks finished lower on Thursday as investors dumped blue-chips such as Samsung Electronics, Hyundai Motor and POSCO on jitters that the stronger won may hurt their profits. The South Korean won rose against the U.S. dollar.
The benchmark Korea Composite Stock Price Index shed 12.85 points, or 0.66 percent, to close at 1946.11. Trading volume was heavy at 272.05 million shares worth 4.6 trillion won ($4.3 billion), with gainers outpacing losers 434 to 389.
The market started higher on gains in tech and auto shares, but it finished lower as investors were worried about the won’s ascent against the greenback eating into key exporters’ profits.
“The strength of the won against the dollar left investors nervous about the future earnings of market heavyweights like Samsung Electronics,” said Eric Lee, an analyst at Daishin Securities Co.
The decline of chemical shares sparked by pessimistic assessment on the industry’s fourth-quarter earnings is another reason for the bearish market, he said.
Tech behemoth Samsung Electronics fell 1.24 percent to 1,275,000 won, ending in negative terrain for the third straight trading day.
Top chip maker SK hynix closed down 0.38 percent at 38,850 won, as retail investors locked in gains made from Friday.
No. 1 steel maker POSCO shed 2.23 percent to 306,500 won, and the country’s biggest automaker Hyundai Motor fell 2.18 percent to 224,500 won.
Gains in financial shares reduced the decline. Financials rallied after the Bank of Korea froze its key interest rate at 2.5 percent for the eighth consecutive month.
Shinhan Financial Group, the biggest banking firm by market cap, rose 2.23 percent to 45,850 won, and Woori Finance gained 1.16 percent to 13,050 won.
STX, which has been under the self-rescue program to reduce its debts since May 2013, rose 3.07 percent to 2,690 won on hopes that its new share issuance would improve its financial health. The de facto holding company of cash-strapped STX Group said after market closing on Wednesday that it will raise 65 billion won.
Hotel Shilla advanced 0.7 percent to 71,500 won, extending its winning streak to two trading days on news that its travel retail division Shilla Duty Free has secured rights to operate perfume and cosmetics stores at Singapore’s Changi Airport.
The local currency ended at 1,062.90 won versus the greenback, up 2.00 won from Wednesday’s close as the central bank left its key interest rate unchanged. (Yonhap News)