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S Korean shares fall ahead of Europe events

01-11-2012 16:38 BJT

SEOUL, Jan. 11 (Xinhua) -- South Korean shares fell on Wednesday after rallying a day earlier as investors took cautious stance ahead of major European events such as bond issuance by Italy and Spain, analysts said.

The benchmark Korea Composite Stock Price Index (KOSPI) fell 7. 67 points, or 0.41 percent, to close at 1,845.55. Trading volume stood at 442.47 million shares worth 4.76 trillion won (4.11 billion U.S. dollars).

The KOSPI started slightly higher on Wall Street gains overnight, but fluctuated in and out of positive terrain throughout the session to end bearish ahead of major events in Europe. The European Central Bank (ECB) will hold its regular monetary policy meeting Thursday and the debt-ridden Italy and Spain will raise funds via government bond issuance. "Foreign and institutional investors were net buyers, but overall market sentiment remained fragile ahead of major events in Europe. Foreigners bought more shares than they sold, but they offloaded tech and chemical shares, weighing on investors' sentiment," Jeong Seung-jae, an analyst at Mirae Asset Securities in Seoul, told Xinhua.

Jeong noted that if the bond auction by Italy was worse than expected, concerns would mount over Europe's debt crisis, saying that worries over the U.S. economic recovery may come to the fore in the foreseeable future as the latest economic indicators from the U.S. possibly reflected the year-end effect.

Retail investors led the market decline by offloading a net 855 billion won worth of stocks, and program-linked transaction posted net selling worth 34.1 billion won.

Foreign investors bought a net 101.4 billion won worth of local shares, but failed to turn the KOSPI into positive terrain. Local institutions purchased a net 81.6 billion won worth of stocks.

Large-cap shares showed mixed picture. Top automaker Hyundai Motor edged up 0.22 percent to 227,000 won, but its affiliate Kia Motors slid 0.59 percent to 67,700 won. The nation's No.2 airliner Asiana Airlines gained 3.27 percent to 6,630 won, but its bigger rival Korean Airline dipped 1.05 percent to 42,450 won.

Tech and chemical shares ended bearish due to foreign selling. Market bellwether Samsung Electronics inched down 0.49 percent to 1,021,000 won, and memory chip giant Hynix Semiconductor lost 0.41 percent to 24,250 won. Top crude oil refiner SK Innovation fell 1. 57 percent to 156,500 won, and leading chemical firm LG Chem edged down 0.31 percent to 323,000 won.

The local currency closed at 1,158.7 won against the greenback, down 2.2 won from Tuesday's close.

Bond prices ended mixed. The yield on the liquid three-year treasury notes closed unchanged at 3.38 percent, but the return on the benchmark five-year government bonds lost 0.01 percentage point to 3.5 percent.

 

Editor:Bai Yang |Source: Xinhua

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