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Profit-taking pushes shares down 0.51%

South Korean stocks closed 0.51 percent lower on Tuesday as institutions and retail investors opted to lock in profits from the recent rallies as the main stock index neared the 1,900 mark for the first time in nearly two months, analysts said. The local currency climbed against the U.S. dollar.

After surpassing the 1,900-level at one point, the benchmark Korea Composite Stock Price Index slipped 9.67 points to 1,888.65. Trading volume was moderate at 348.6 million shares worth 5.97 trillion ($5.28 billion), with decliners outnumbering gainers 513 to 305.

“Some investors offloaded their shares as the KOSPI approached the 1,900 mark, which weakened the KOSPI’s upward strength,” said Park Sung-hun, an analyst at Woori Investment & Securities Co.

The KOSPI has made gains during 11 out of the past 16 trading sessions this month.

“Overall, situations are improving. The European debt crisis seem to be getting solved step by step and U.S. stock markets are also faring well,” he said.

Refiners and automakers led the decline. Top refiner SK Innovation fell 2.37 percent to 165,000 won and its smaller rival S-Oil lost 1.79 percent to 110,000 won. Auto-parts maker Hyundai Mobis fell 2.23 percent to 351,500 won.

OCI, the country’s top polysilicon maker, also tumbled 5.91 percent to 207,000 won after brokerages downgraded their target price on projections the company is likely to see downbeat earnings until the first half of next year.

In contrast, financials were bullish, with No. 3 banking group Shinhan Financial Group adding 2.04 percent to reach 45,050 won.

Hana Financial Group, the country’s fourth-largest banking group, advanced 3.8 percent to 39,650 won on views the financial regulator is set to order U.S. buyout firm Lone Star Funds to sell down its stake in Korea Exchange Bank, a move that will pave the way for Hana Financial’s acquisition of the fifth-largest lender. KEB stayed flat at 7,710 won.

State power company Korea Electric Power Corp. jumped 2.53 percent to 24,350 won.

“Moody’s Investors Service’s earlier-than-expected rating downgrade of KEPCO is likely to create circumstances for a fee hike. In order to make up for growing difficulties in securing funds, the company is expected to raise fees,” Korea Investment & Securities Co. analyst Yoon Hee-do said in a report.

Market bellwether Samsung Electronics also outperformed the market, edging up 0.43 percent to 945,000 won.

The local currency closed at 1,129 won against the greenback, up 5.4 won from Monday’s close, amid growing optimism on the eurozone issue, dealers said. 

(Yonhap News)
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