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Seoul stocks inch down on Chinese developers' debt crises

Electronic signboards at a Hana Bank dealing room in Seoul show the benchmark Korea Composite Stock Price Index (Kospi) closed at 2,956.3 on Friday, down 3.16 points or 0.11 percent from the previous session's close. (Yonhap)
Electronic signboards at a Hana Bank dealing room in Seoul show the benchmark Korea Composite Stock Price Index (Kospi) closed at 2,956.3 on Friday, down 3.16 points or 0.11 percent from the previous session's close. (Yonhap)
South Korean stocks closed slightly lower Friday largely on the back of growing concerns about giant Chinese property developers' debt crisis. The Korean won fell against the US dollar.

The benchmark Korea Composite Stock Price Index (Kospi) declined 3.16 points, or 0.11 percent, to close at 2,956.3 points.

Trading volume was moderate at about 659 million shares worth some 12.5 trillion won ($10.5 billion), with gainers outnumbering losers 484 to 384.

Foreigners sold a net 49 billion won, while retail investors bought 465 billion won. Institutions offloaded a net 454 billion won.

The Kospi got off to a strong start after overnight Wall Street gains, as a temporary resolution of the debt-ceiling tussle is due for a vote in Washington.

Overnight, the tech-heavy Nasdaq composite advanced 1.05 percent, and the S&P 500 moved up 0.83 percent. The Dow Jones Industrial Average climbed 0.98 percent.

Expectations of strong third-quarter corporate earnings also boosted the investor sentiment, as the KOSPI's top cap Samsung Electronics Co. is expected to post record sales in the third quarter, apparently buoyed by its semiconductor business.

The key stock index turned to losses in the afternoon, following reports that trading was suspended for the heavily indebted Fantasia Holdings Group Co., a developer of luxury apartments in China.

Investors have kept a wary eye on the communist country's move to tighten its regulations to reign in the property market. Evergrande Group, one of the leading property developers in China, remained a risk in the Asian stock markets.

"Investors seem to be under psychological pressure from China, since Evergrande and other developers are struggling to repay their debt on time," HI Investment & Securities analyst Park Sang-hyun said.

In Seoul, Samsung Electronics slipped 0.14 percent to 71,500 won, and No. 2 chipmaker SK hynix retreated 1.78 percent to 94,000 won.

Internet portal operator Naver lost 1.27 percent to 388,500 won, but pharmaceutical giant Samsung Biologics increased 1.84 percent to 830,000 won.

Top automaker Hyundai Motor gained 1.99 percent to 205,000 won, and leading chemical firm LG Chem jumped 3.66 percent to 764,000 won.

The local currency closed at 1,194.6 won to the US dollar, down 4.2 won from the previous session's close.

Bond prices, which move inversely to yields, closed higher. The yield on three-year Treasurys lost 0.3 basis point to 1.701 percent, and the return on the benchmark five-year government bond fell 1.7 basis points to 2.049 percent. (Yonhap)

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