South Korean stocks fell 1.42 percent Thursday as foreign investors offloaded local shares amid concerns the U.S. Federal Reserve may reduce its quantitative easing, analysts said. The local currency fell against the U.S. dollar.
The benchmark Korea Composite Stock Price Index (KOSPI) shed 27.18 points to close at 1,882.73. Trading volume was low at 301.9 million shares worth 4.95 trillion won (US$4.36 billion) with losers outpacing gainers 550 to 257.
It marked the first time for the index to close below the 1,900 mark since Nov. 22, 2012, when the KOSPI closed at 1,899.50.
"The Asian financial market is losing ground on the rising concerns the U.S. Federal Reserve may reduce its economic stimulus measures," said Lim Soo-kyun, a researcher at Samsung Securities Co.
"Foreign investors are offloading their share holdings especially on the emerging markets."
Park Sung-hoon, an analyst at Woori Investment & Securities Co., echoed the view, adding investors also sat on the sidelines due to the U.S. Federal Open Market Committee meeting slated for next week.
Market watchers, however, said the central bank's move to freeze its key interest rate had only a limited impact on the market as such a decision had already been priced in.
"There is only a little chance for the central bank to slash the key interest rate for the time being," said Kim Sun-young, a researcher at IBK Investment & Securities Co.
South Korea's central bank froze the key interest rate Thursday in an apparent move to assess the impact of its surprise cut in May on the local economy amid growing speculation over the tapering off of credit easing policies by major economies.
The Bank of Korea left the benchmark seven-day repo rate unchanged at 2.5 percent for June.
Foreigners dumped 947.2 billion won worth of local equities, marking the fifth straight session of a selling spree. In contrast, retail and institutional investors scooped up a net 443.3 billion won and 484.9 billion won worth of stocks, respectively.
Samsung Electronics shed 2.02 percent to 1,357,000 won, closing bearish for the sixth consecutive session amid a market outlook that the tech giant will see its profitability fall due to the rising number of competitors in the global smartphone market.
Other tech blue chips also closed lower, with top chipmaker SK hynix falling 0.93 percent to 32,050 won and LG Electronics losing 2.26 percent to 73,500 won.
Carmakers traded lower, with No. 1 player Hyundai Motor losing 2.7 percent to 198,000 won and its smaller affiliate Kia Motors falling 2.08 percent to 56,500 won. Top auto parts maker Hyundai Mobis shed 0.19 percent to 260,000 won.
GS Engineering & Construction moved down 4.21 percent to 30,750won after its chairman Huh Chang-soo stepped down from his position Wednesday.
In contrast, mobile carriers closed higher, with top player SK Telecom rising 0.93 percent to 216,500 won and the smallest player LG Uplus advancing 4.45 percent to 12,900 won.
The local currency ended at 1,134.40 won against the greenback, down 0.80 won from Wednesday's close, due mainly to importers snapping up the greenback for settlements, dealers said. (Yonhap News)
