Shares down on eurozone woes

South Korean stocks closed 1.04 percent lower on Friday as persistent concerns over the eurozone debt crisis and fears over credit downgrades spooked investors, analysts said. The local currency dropped against the U.S. dollar.

The benchmark Korea Composite Stock Price Index slumped 18.66 points to 1,776,4. Trading volume was moderate at 301.2 million shares worth 4.16 trillion won ($3.58 billion), with decliners outnumbering gainers 592 to 238.

“The lackluster results of a summit between Germany, Italy and France weighed down on investor sentiment. Moreover, the downgrade of Hungary and Portugal’s credit ratings renewed fears over the regional issue,” said Park Seung-jin, an analyst at Samsung Securities Co.

Foreigners extended their selling streak to a seventh session, but pension funds and institutions snapped up shares to defend the KOSPI.

Park said the KOSPI may gain next week on the back of anticipation for seasonal shopping demand and a eurozone finance minister meeting on Nov. 29-30, but is unlikely to see strong upward momentum.

Large caps closed mixed. Hyundai Motor lost 3.25 percent to 208,500 won on concerns a new shift plan would erode the top automaker’s efficiency. Its smaller affiliate Kia Motors retreated 4.62 percent to 68,100 won.

Steelmakers also ended in negative territory, with industry leader POSCO falling 1.94 percent to 353,000 won.

In contrast, utilities gained on hopes of an electricity fee hike. State-run electricity provider Korea Electric Power Corp.

surged 4.2 percent to 24,800 won and Korea Gas Corp. jumped 5.79 percent to 39,300 won.

“Shares of utilities are undervalued at the moment and with seasonal demand for power expected to rise, investors bet a price hike would take place,” said Jee Heon-seok, an analyst at NH Investment & Securities Co.

On Thursday, South Korea’s knowledge minister had said he would review all measures regarding the KEPCO board’s plan to push for a 10 percent price hike.

Financials ended higher, with leading banking group Woori Finance Holdings gaining 2.96 percent to 9,390 won and No. 3 financial group Shinhan Financial Group adding 3.21 percent to 38,600 won.

Market bellwether Samsung Electronics closed at 947,000 won, up 0.42 percent from the previous close.

The local currency closed at 1,164.8 against the greenback, down 6.3 won from Thursday’s close as investors fled for safer assets amid persistent fears over Europe’s debt problem, dealers said. 

(Yonhap News)