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Seoul shares drop 1.33% on foreign selling

South Korean stocks closed 1.33 percent lower Friday on continued foreign selling as rosy U.S. jobs data failed to boost weak investor sentiment, analysts said. The local currency gained ground against the U.S. dollar.

The benchmark Korea Composite Stock Price Index (KOSPI) slumped 24.13 points to 1,793.31, dropping below the 1,800 level for the first time in 11 months. Trading volume was heavy at 461.5 million shares worth 8.8 trillion won (US$8.2 billion), with gainers outnumbering losers 511 to 332.

After opening higher on news that the number of U.S. unemployment claims were down, the index swung to negative territory as foreigners and institutions beefed up their selling.

Foreigners dumped a net 280.5 billion won worth of shares, extending their selling streak to a ninth session, while retail investors snapped up a net 488.3 billion won.

“The stock market reacted positively to a decline in U.S. jobless claims. But the impact was soon offset by persistent worries on the U.S. credit rating downgrade and the eurozone’s debt risks,” said Cho Byung-hyun, an analyst at Tong Yang Securities Inc.

Cho said the local stock market will try to rebound next week, but market volatility is expected to linger due to an absence of a significant upward momentum.

Automakers led the way down with top automaker Hyundai Motor dropping 4.57 percent to 188,000 won and its smaller affiliate Kia Motors losing 5.26 percent to 66,600 won.

Chipmakers also ended in negative territory, weighed down by record-low dynamic random access memory (DRAM) chip prices. Top player Samsung Electronics inched down 0.14 percent to 707,000 won and No. 2 player Hynix Semiconductor plunged 9.61 percent to 19,750 won.

In contrast, retailers finished bullish. The country’s leading discount chain operator E-Mart jumped 6.49 percent to 279,000 won and department chain operator Shinsegae climbed 6.41 percent to 315,500 won.

Korea Express soared 13.02 percent to 92,000 won on news that CJ is likely to continue to proceed with its purchase of the top logistics firm despite the recent sharp fall in share prices of Korea Express.

The local currency closed at 1,078.5 won to the greenback, up 3.3 won from Thursday’s close amid persisting worries on the U.S. economy, dealers said. 

(Yonhap News)