The Korea Herald

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지나쌤

Seoul shares drop on institutional selling

By Korea Herald

Published : Dec. 26, 2011 - 16:24

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Korean stocks finished 0.56 percent lower on Monday as uncertainties about Europe overshadowed upbeat U.S. data, prompting institutional sell-offs, analysts said.

The local currency fell against the U.S. dollar.

After opening briefly higher, the benchmark KOSPI dropped 10.52 points to 1,856.70. Trading volume was moderate at 424 million shares worth 2.97 trillion won ($2.58 billion) with losers outpacing gainers 448 to 357.

“Investors are not paying much attention to past economic data as they are more focused on the future of Europe risks,” said Lee Kyung-soo, an analyst at Shinyoung Securities Co. “That is why upbeat U.S. economic data do little to ease high investor appetite for safety assets.”

Even though reports showed that orders for U.S. durable goods and home sales had increased, they were not strong enough to convince investors to bet on risky assets.

Institutional investors cut 50.7 billion won worth of local stocks. Pension funds including the National Pension Service turned to a net selling position after weeks of net buying.

Foreign investors were net buyers but doubts abound whether their buying streak can be extended, Lee added.

Large-cap companies lost ground including shipbuilders, machinery makers and auto exporters as investors questioned their earnings outlook.

The world’s biggest shipyard, Hyundai Heavy Industries, lost 2.18 percent to 269,000 won and Doosan Infracore, the leading construction equipment maker, slid 1.4 percent to 17,600 won.

Hyundai Motor also drifted down 0.23 percent to 214,500 won while its smaller affiliate Kia Motors was down 1.03 percent to 67,200 won.

The local currency closed at 1,155.0 won to the greenback, down 4.6 won from Friday’s close, as investors were still hesitant to bet big on risky assets amid holiday-thinned trading, dealers said. 

(Yonhap News)