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Seoul shares shed 0.65 pct on Fed woes


South Korean stocks closed 0.65 percent lower Wednesday, as investors took to the sidelines on anxiety that the U.S. Federal Reserve may do little to reassure them about maintaining the monetary easing, analysts said. The
local currency inched up against the U.S. dollar.
   
The benchmark Korea Composite Stock Price Index (KOSPI) retreated 12.31 points to finish at 1,888.31. Trading volume was light at 276.2 million shares worth 3.26 trillion won (US$2.87 billion) with decliners outnumbering gainers 466 to 346.
  
"Investors opted to stay on the sidelines amid a split view on what Bernanke will say after the meeting," said Lim Soo-gyun, an analyst at Samsung Securities Co.
   
The U.S. Federal Reserve is scheduled for a two-day policy meeting on June 18-19, U.S. time, and all eyes are on the words of Fed Chairman Ben Bernanke, who hinted earlier of a possible tapering of its monetary easing.
  
His attitude prompted the emerging markets to tumble last week, sending the Seoul bourse to break the psychologically important 1,900 level.
   
"Our market has become a sort of a benchmark for foreign investors due to its soundness compared with other emerging peers.
So Seoul gets the first hit (of foreign selling) whenever something happens in the developed nation," Lim added.  
 
Foreigners continued to dump local shares for the ninth consecutive session, selling a net 129.9 billion won on Wednesday.
  

Machineries and builders drove down the main index. Heavy equipment maker Doosan Heavy Industries sank 2.75 percent to 42,400 won, and No. 1 player Hyundai Engineering & Construction slumped 3.19 percent to 57,700 won. Confectionery maker Orion tumbled 4.89 percent to 1,051,000 won.
   
Top-cap Samsung Electronics slid 1.3 percent to 1,369,000 won, largely led by the foreign selloff.
  
In contrast, leading automaker Hyundai Motor gained 1.47 percent to 207,500 won as fear over the yen's descent waned.   

The local currency ended at 1,130.80 won against the greenback, up 0.3 won from Tuesday's close on the dollar's slight fall, but the won stayed mostly weaker to the U.S. currency throughout the session, dealers said.
  
Bond prices, which move inversely to yields, closed lower. The yield on three-year Treasuries rose 0.04 percentage point to 2.81 percent and the return on the benchmark five-year government bonds also gained 0.04 percentage point to 3.02 percent. (Yonhap News)

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