Seoul shares fall 1.41 percent on fading eurozone optimism

South Korean stocks closed 1.41 percent lower on Tuesday as remarks from Germany dampened investor hopes on the eurozone debt crisis resolution ahead of a European Union summit later this week, analysts said. The local currency fell against the U.S. dollar.

The benchmark KOSPI slumped 26.28 points to 1,838.9, snapping an eight-session gaining streak.

Trading volume was moderate at 313.7 million shares worth 5.7 trillion won ($4.9 billion), with decliners outnumbering gainers 637 to 211.

“The comments from Germany did play a role in driving down the KOSPI, but at the same time, investors had been waiting to take a breather after the recent rally,” said Cho Byung-hyun, an analyst at Tong Yang Securities Inc.

On Monday, German Chancellor Angela Merkel’s spokesman Steffen Seibert said measures would be agreed on at the meeting of European leaders this weekend but warned they may not be a panacea for the eurozone’s debt woes.

“Although the remarks dented investor sentiment, there is no need to exaggerate their meaning as a negative factor,” said Cho.

Blue-chip exporters lost ground. Top steelmaker POSCO fell 2.79 percent to 366,000 won and leading shipyard Hyundai Heavy Industries slumped 3.33 percent to 290,000 won.

Financials also closed bearish, with No. 3 banking group Shinhan Financial Group sliding 4.17 percent to 43,650 won.

No. 1 insurer Samsung Life Insurance tumbled 6.67 percent to 84,000 won after its shareholders CJ Cheiljedang Corp. and CJ O Shopping Co. decided to sell their stakes in a bid to secure funds for their parent group’s takeover of top logistics firm Korea Express Co.

In contrast, some issues outperformed the market. No. 3 mobile carrier LG Uplus jumped 4.83 percent to 7,160 won on robust sales of its long-term evolution smartphones.

LG Electronics gained 1.25 percent to 72,900 won, gaining for the first time after global credit appraisers Moody’s Investors Service and Standard & Poor’s cut their ratings on the tech heavyweight.

SK Innovation closed at 162,000 won, up 1.57 percent from Monday’s close, on hopes the leading refiner would post better-than-expected earnings for the third quarter.

The local currency closed at 1,145.6 won against the greenback, down 5.1 won from Monday’s close, due to foreign stock selling and renewed eurozone worries, dealers said. 

(Yonhap News)