Seoul shares down 0.2 pct on institution selling

South Korean stocks ended 0.2 percent lower Wednesday as institutions offloaded shares ahead of the so-called quadruple witching, analysts said.

The benchmark Korea Composite Stock Price Index (KOSPI) fell 3.94 points to 1,980.83. Trading volume was moderate at 376.7 million shares worth 5.71 trillion won ($5.07 billion), with decliners beating gainers 478 to 333.

"Quadruple witching" refers to the simultaneous expiration of contracts for stock index futures, stock index options, stock options and stock futures, and usually causes volatile trading on the market.

"The volatility in the market usually comes a few days before the actual day that stock contracts expire, which would be tomorrow," said Lee Jae-hoon, an analyst at Mirae Asset Securities Co.

"For this reason, we can see that institutions, and especially investment firms, led the day's selling spree."

Institutions sold off a net 353.31 billion won, whereas foreigners scooped up a net 93.34 billion won. Retail investors bought more shares than they sold at 256.04 billion won.

"Also, until next week's Federal Open Market Committee meeting reveals further clues on the timing of a rate hike in the United States, it is likely that investors will keep their wait-and-see approach for the time being," Lee added.

Tech shares closed mixed, with market leader Samsung Electronics jumping 3.73 percent to 1,474,000 won, whereas chipmaker SK hynix slipped 1.7 percent to 43,400 won. Flat screen manufacturer LG Display moved up 0.82 percent to close at 30,900 won.

Mobile carriers were also in negative terrain. Industry leader SK Telecom shed 0.55 percent to 269,000 won and No. 3 player LG Uplus dropped 1.74 percent to 11,300 won. KT also stepped down 1.68 percent to 29,350 won.

Auto industry leader Hyundai Motor jumped 2.02 percent to 176,500 won, following news reports that the carmaker is planning to build a second factory in the United States to raise its production and sales of sport utility vehicles in the world's No. 1 economy.

The country's second-largest carmaker Kia Motors, on the other hand, edged down 0.32 percent to close at 47,300 won, while car parts maker Hyundai Mobis advanced 0.58 percent to 258,000 won.

Other large market cap shares moved in different directions, with top steelmaker POSCO going up 0.75 percent to 269,000 won, while state-run utility giant Korea Electric Power fell back 0.57 percent to finish at 43,700 won.

The local currency fell for the third consecutive day to close at its lowest level in 19 months against the greenback at 1,126.50 won, down 3.90 won from the previous day's close. (Yonhap)