Seoul stocks fall on foreign selling ahead of US Fed meeting

South Korean stocks slumped after a choppy session Wednesday, largely due to heavy foreign selling related to concerns over fiscal policy tightening in major financial markets. The Korean won rose against the US dollar.

The benchmark Korea Composite Stock Price Index (KOSPI) fell 17.75 points, or 0.57 percent, to close at 3,122.56 points.

Trading volume was moderate at about 905 million shares worth some 19.4 trillion won ($17.6 billion), with losers outnumbering gainers 574 to 293.

Foreigners sold a net 623 billion won and institutions offloaded a net 397 billion won, while retail investors purchased a net 1.06 trillion won.

The KOSPI got off to a muted start ahead as investors waited for the results of the US Federal Reserve's policy meeting, and losses widened in the afternoon.

Faster-than-expected recovery in the Chinese economy also raised worries that emerging economies may hasten the tightening of their fiscal policies.

"Foreigners (had bought because they) have been optimistic about (a fast recovery in) South Korea's economy," Eugene Investment & Securities analyst Huh Jae-hwan said.

"But the recent hike in China's short-term interest rate seems to have made them wary," he added.

Most large caps closed lower in Seoul.

Market bellwether Samsung Electronics lost 1.27 percent to 85,600 won, and No. 2 chipmaker SK hynix shed 0.39 percent to 128,500 won.

Top pharmaceutical firm Samsung Biologics jumped 5.86 percent to 849,000 won, and Celltrion gained 2.02 percent to 329,000 won.

Internet portal giant Naver slipped 0.15 percent to 341,500 won, while its rival Kakao advanced 0.87 percent to 465,000 won.

Leading chemical maker LG Chem fell 2.83 percent to 928,000 won, and rechargeable battery maker Samsung SDI slid 0.13 percent to 789,000 won.

Hyundai Motor, the country's largest automaker, fell 2.39 percent to 245,500 won, while top steelmaker Posco moved up 0.78 percent to 259,500 won.

The local currency closed at 1,104.4 won per dollar, up 2.1 won from the previous session's close.
 
Bond prices, which move inversely to yields, closed higher. The yield on three-year Treasurys lost 2.5 basis points to 0.982 percent, and the return on the benchmark five-year government bond fell 1.3 basis points to 1.335 percent. (Yonhap)