S.Korean shares fall on global economic worries

Source:Xinhua Published: 2012-7-10 16:45:00

South Korean shares fell for three straight sessions on Tuesday as foreign investors kept their selling streak amid concerns over global economic slowdown.

The benchmark Korea Composite Stock Price Index (KOSPI) fell 6. 68 points, or 0.36 percent, to close at 1,829.45. Trading volume stood at 363.94 million shares worth 3.31 trillion won ($2.9 billion).

The KOSPI started higher on views over undervaluation of the local stock market, but the index turned into negative terrain in the afternoon session on lingering worries about the global economic downturn.

Concerns spread over the global economy following the announcement of the weaker-than-expected job report in the United States. Job creation in the world's largest economy stood merely at 80,000 in June, lower than Wall Street forecast.

Yields of both Spain and Italy's government bonds surged recently, nearing around the 7 percent level that has been regarded as unsustainable. The higher yields hinted at strong worries about the region's debt outlook.

Economic data in China also disappointed investors. China's exports grew 11.3 percent on-year to $180.21 billion in June, but the growth was lower than a 15.3 percent increase in May.

Foreign investors led the market fall. Foreigners offloaded a net 114.4 billion won worth of local stocks, keeping their selling streak for two trading days in a row. Institutional investors maintained their selling trend for three straight sessions by selling a net 25.7 billion won worth of stocks.

Retail investors purchased a net 1715 billion won worth of stocks, but they failed to shore up the local stock market throughout the session.

Chemical and banking shares lost ground. Leading chemical firm LG Chem declined 1.9 percent to 301,000 won, and top crude oil refiner SK Innovation dipped 1.1 percent to 140,500 won. The country's leading banking group KB Financial Group was down 0.3 percent to 36,800 won, and Shinhan Financial Group retreated 1.3 percent to 38,000 won.

Large-cap shares ended mixed. Top automaker Hyundai Motor dipped 0.2 percent to 228,000 won, and the nation's largest steelmaker POSCO fell 0.4 percent to 372,500 won. The world's largest shipyard Hyundai Heavy Industries retreated 0.4 percent to 261,000 won, but Samsung Electronics edged up 0.1 percent to 1,127, 000 won after plunging more than 3 percent in the previous session.

The nation's No. 2 carmaker Kia Motors gained 0.8 percent to 73, 100 won, and top life insurer Samsung Life Insurance rose 0.1 percent to 93,600 won. The country's biggest auto parts maker Hyundai Mobis closed unchanged at 269,000 won, and SK Hynix finished flat at 23,700 won.

The local currency finished at 1,143.7 won against the greenback, down 2.6 won from Monday's close.

Bond prices ended lower. The yield on the liquid three-year treasury notes added 0.01 percentage point to 3.22 percent, and the return on the benchmark five-year government bonds rose 0.01 percentage point to 3.34 percent.

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