Nasdaq Dampens Seoul Trade Vigor

Share prices in Seoul closed slightly lower Tuesday, as investors were reluctant to make any major moves amid doubts over how big an interest rate cut the U.S. Federal Reserve Board will make in its meeting later in the day.

The Korea Composite Stock Price Index lost 2.78 points, or 0.5 percent, to 581.30, off a high of 585.74 and a low of 579.08.

Trading was heavy at 558 million shares, valued at 1.9 trillion won ($1.5 billion).

Decliners led gainers 478 to 325, with 57 other stocks unchanged. Seven issues tumbled by the daily limit of 15 percent, while 20 shares were up by that limit.

Analysts said that investor sentiment was negative, spurred by losses in the U.S. Nasdaq index ahead of the Fed meeting.

"U.S. stock markets are expected to fall if the Fed cuts its key interest rate by only a quarter of a percentage point," said Kim Jung-pyo, an analyst at Kyobo Securities Co. "But a half-point cut would result in a rebound."

Samsung Electronics Co. shed 2 percent to 217,000 won and SK Telecom Co. slid 4 percent to 209,000 won. Hynix Semiconductor Inc., which jumped 15 percent Monday, lost ground on profit-taking, finishing down 5.6 percent at 4,380 won on top volume of 70.7 million shares.

Limiting the day's losses, bank shares rose on expectations of progress to be made in the handling of two major debt-ridden companies, Hynix and Daewoo Motor Co.

Korea Exchange Bank surged 6.5 percent to 2,380 won and Chohung Bank gained 4.1 percent to 2,310 won.

Daewoo Motor Sales, Daewoo Motor's domestic retail arm, and Ssangyong Motor Co. soared by the daily limit on continued expectations about a takeover of the two firms by the American carmaker General Motors.

The Kosdaq market bore the brunt of the Nasdaq's four-day decline. Its composite index fell 1.45 points, or 1.7 percent, to 81.48.

Most large-capitalized stocks took a beating, leading the day's losses. KT Freetel dropped 1.5 percent to 43,000 won and Serome Technology sank 4.7 percent to 20,500 won.

by Kim Hyun-chul