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Seoul stocks down for 2nd day on IMF outlook cut

Korean stocks edged down on Wednesday, sliding for a second consecutive session, as investor sentiment was hurt by the International Monetary Fund's downward revision of its economic outlook. The Korean won fell against the U.S. dollar.

The benchmark Korea Composite Stock Price Index fell 1.43 points, or 0.07 percent, to close at 2,015.46. Trade volume was light at 309 million shares worth 3.44 trillion won ($3.01 billion), with losers outnumbering gainers 425 to 357.
(Yonhap)
(Yonhap)

The local stock market opened lower on profit-taking. Last week, the KOSPI surged 2.76 percent on the back of a foreign buying binge and Samsung Electronics Co.'s continued rise. On Tuesday, the KOSPI snapped its six-day consecutive upward run.

The IMF cut its outlook on global economic growth to 3.1 percent from the previous 3.2 percent, prodding investors to lock in gains.

But some analysts said central banks around the globe may extend their monetary easing steps following Britain's decision to exit the European Union, pumping more liquidity into the financial market.

"A rally in emerging markets may be extended given their valuation merit and monetary easing," said Kim Jin-young, an analyst at NH Investment & Securities. "Earnings hopes and low valuations may prompt offshore investors to continue to buy local stocks."

Foreign investors scooped up a net 180 billion won worth of local stocks, extending their buying binge to a 10th consecutive session.

Banking, steelmakers and telecom stocks suffered losses, while securities and textile firms advanced.

Top market cap Samsung Electronics rose 0.46 percent to end at 1,540,000 won, and AmorePacific, the No. 1 cosmetics maker, gained 0.48 percent to 422,000 won.

SK hynix, a global chipmaker, dipped 1.08 percent to 32,100 won.

Naver, the operator of the country's top internet portal, dropped 3.2 percent to 695,000 won, and POSCO, the country's top steelmaker, shed 0.38 percent to end at 218,500 won.

Automakers traded in negative terrain, with industry leader Hyundai Motor down 0.38 percent to 129,500 won. Hyundai Motor workers staged a partial strike for a second day demanding a pay raise and better working conditions.

The local currency closed at 1,141.00 won against the U.S. dollar, up 5.5 won from the previous session's close.

Bond prices, which move inversely to yields, closed higher. The yield on three-year Treasurys fell 0.6 basis point to 1.221 percent and the return on the benchmark five-year government bond shed 0.7 basis point to 1.247 percent. (Yonhap)

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