Seoul Shrugs Off Wall Street Rally

Mixed views on the possibility of a quick U.S. interest rate cut swayed Seoul stocks Tuesday.

Both the main board and the Kosdaq market started strong after Wall Street rallied overnight on optimism that the U.S. Federal Reserve will slash interest rates for the third time in this year before its March 20 meeting, perhaps as early as this week.

But the strength was sapped by profit taking and by selling on rumors which threw cold water on the possibility of an early U.S. rate cut. Both markets slipped into negative territory in the afternoon.

"The rumor that Alan Greenspan would resign and the simultaneous downward movement of Asian stock markets made investors more skeptical," an analyst at Daishin Securities said.

The Korea Composite Stock Price Index lost 7.75 points, or 1.32 percent, to close at 577.57. Retail and institutional investors sold. Foreign investors purchased on the spot market but sold on the futures market, spurring heavy program selling on the spot market. Trade volume was 462 million shares, valued at 1.97 trillion won ($1.58 billion).

Core blue chips generally lost. Samsung Electronics shed 1.30 percent, ending at 189,500 won. Hyundai Electronics Industries declined 2.79 percent to 3,830 won. SK Telecom was down 2.12 percent to 208,000 won. Korea Telecom lost 1.81 percent, finishing at 65,000 won.

As an exception, Pohang Iron & Steel Co. climbed 2.05 percent to 99,500 won, on purchases by foreign investors.

Losing issues led gainers 556 to 254. Thirty-two shares rose 15 percent, the daily ceiling. Twelve issues hit the floor.

The Kosdaq composite index closed at 78.12, down 3.13 points, or 3.85 percent. Trade volume was 438 million shares, valued at 2.39 trillion won. Leading telecommunications issues generally lost. KT Freetel was off 2.09 percent, ending at 39,750 won. KT M.Com was down 3.03 percent to 9,270 won. LG TeleCom tumbled 8.39 percent. Dot-coms were also weak. Declining issues outpaced advancers 481 to 101. A total of 34 shares fell by the daily limit of 12 percent, while 23 issues hit the upward limit.

by Moon So-young