The Korea Herald


Seoul shares down 0.62 pct on MERS woes

By KH디지털2

Published : June 10, 2015 - 11:39

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South Korean stocks ended 0.62 percent lower on Wednesday as investor worries deepened over the fallout of Middle East Respiratory Syndrome on the country's economy, analysts said. The local currency gained ground against the U.S. dollar.

The benchmark Korea Composite Stock Price Index fell 12.71 points to 2,051.32. Trading volume was moderate at 422.26 million shares worth 6.15 trillion won ($5.5 billion), with decliners beating gainers 437 to 368.

"The market got a boost earlier from the MSCI's decision to hold off on the inclusion of Chinese stocks in its index, but it turned south as concerns over MERS and other uncertainties kept investors on the sidelines," said Kim Hyung-ryol, an analyst at Kyobo Securities.

Major shares started higher as investor sentiment improved after U.S index provider MSCI said earlier in the day that it will hold off including some China-listed shares in its emerging market index. The inclusion could have sparked an outflow of money from here to China.

South Korea is gripped by worries over the wider spread of MERS that has claimed nine lives as of Wednesday, since its first outbreak last month. Over 100 people have been confirmed to be infected with the virus.

Airlines and cosmetic shares were among the market losers, dragged down by worries that the MERS outbreak could hurt their business by reducing inbound travelers. Rising oil prices, in particular, added to concerns for airline companies as they mean more costs down the road.

Korean Air Lines, the country's largest flag carrier, dropped 4.28 percent to 38,050 won, while smaller rival Asiana Airlines plunged 6.75 percent to 6,080 won.

Cosmetics giant AmorePacific dropped 2.51 percent to 389.000 won, while LG Household & Health Care shed 5.18 percent to 750,000 won.

Market bellwether Samsung Electronics continued its downward trend by losing 1.56 percent to hit 1,262,000 won, while Naver, the No. 1 Internet portal operator, fell 3.73 percent to 568,000 won.

Telecom shares, however, closed higher with mobile carrier SK Telecom jumping 1.99 percent to 256,500 won. Kia Motors advanced 2.43 percent to 44,250 won after announcing that it will enter the Mexican market with its vehicles starting next month.

Samsung C&T, the trading and construction arm of Samsung Group, surged 10.29 percent to close at 75,000 won, continuing its volatile trading amid a legal battle initiated by a U.S. hedge fund over its envisioned merger with Cheil Industries. The spike followed a 3.55 percent fall on Tuesday.

The South Korean currency ended at 1,108.2 won against the greenback, up 10.7 won from Tuesday's close.

Bond prices, which move inversely to yields, ended lower. The yield on three-year Treasurys rose 4 basis points to 1.773 percent, and the return on the benchmark five-year government bonds went up 3.1 basis points to 2.026 percent. (Yonhap)