Shares inch down on U.S. fiscal woes

South Korean stocks edged down 0.19 percent Monday as investors sat on the sidelines on renewed fiscal woes in the United States, analysts said. The local currency lost against the U.S. dollar.

The benchmark Korea Composite Stock Price Index dipped 3.54 points to close at 1,900.87. Trading volume was moderate at 468.6 million shares worth 3.73 trillion won ($3.4 billion) with losers outpacing gainers 436 to 387.

“The fiscal cliff issue that recently dampened investors sentiment just after the U.S. president election is not fresh news,” said Lee Jae-hoon, an analyst for Mirae Asset Securities Co.

“They see it is imminent as billions of dollars of tax cuts will soon expire and automatic spending reductions take effect on the first day of next year.”

The main index started 5 points lower at 1899.3 but recovered the losses to close over the psychological support line of 1,900 points on the back of China’s better-than-estimated export data.

“Fundamentals are fairly strong as the KOSPI stayed above the 1,900-point level. But continuing foreign selling blocks the index from making a turnaround,” said Lee.

Foreigners offloaded a net 156.4 billion won worth of local shares for three consecutive sessions, while institutions scooped up a net 102.9 billion won and retail investors bought 38.7 billion won.

Market heavyweights led the decline. Top steelmaker POSCO lost 1.07 percent to 323,000 won and Korea Zinc, the world’s second-largest zinc smelter, skidded 0.77 percent to close at 451,000 won.

Shipbuilders also ended bearish, with leading shipyard Hyundai Heavy Industries tumbling 3.08 percent to 204,500 won and Daewoo Shipbuilding & Marine Engineering slumping 3.98 percent to 22,900 won. (Yonhap News)