South Korean stocks closed 0.34 percent lower on Wednesday as the Federal Reserve failed to lay out new stimulus measures to prop up the economy, analysts said. The local currency fell against the U.S. dollar.
The benchmark KOSPI fell 6.31 points to 1,857.75. Trading volume was moderate at 396.6 million shares worth 4.36 trillion won ($3.77 billion), but gainers outpaced losers 433 to 381.
“The market was largely lackluster. The Seoul bourse started weaker due to a lack of the Fed’s fresh economic stimulus steps, but what fundamentally weighed on the market was Europe’s debt crisis,” said Kwak Joong-bo, a market analyst at Samsung Securities.
The Federal Reserve froze the federal funds rate at zero to 0.25 percent on Tuesday, as widely expected, saying that the U.S. economy has been “expanding moderately” despite the global slowdown.
But the U.S. central bank warned that strains in global financial markets stemming from Europe’s debt crisis continue to pose “significant downside risks” to the growth outlook.
Foreign investors dumped a net 348.3 billion won worth of local stocks on the main bourse, the second straight day of sell-offs.
Market leader Samsung Electronics fell 0.95 percent to 1,040,000 won and flat panel giant LG Display declined 2.07 percent to 23,700 won.
Carmakers lost ground. Leading automaker Hyundai Motor shed 0.71 percent to 209,000 won and its affiliate Kia Motors lost 1.34 percent to 66,100 won.
But China-related shares gained ground on market expectations that China may tilt toward an economic stimulus stance for next year. Top steelmaker POSCO added 0.13 percent to 390,000 won and leading power equipment maker Doosan Heavy Industries & Construction rose 1.59 percent to 70,500 won.
The local currency closed at 1,156.20 won to the greenback, down 2.2 won from Tuesday’s close, as foreign investors reduced their holdings of local stocks, dealers said. (Yonhap News)
