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U.S. mortgage support doesn’t help markets

July 15,2008
Korean stocks finished lower yesterday after a roller-coaster session. Foreign investors continued their selling spree amid concerns over the health of the U.S. financial market, analysts said. The local currency fell against the U.S. dollar.

The benchmark Korea Composite Stock Price Index dropped 8.89 points, or 0.57 percent, to 1,558.62 after rising above the 1,580 mark in earlier trading.

Volume was thin at 253.7 million shares worth 3.76 trillion won ($3.75 billion), with losers outpacing gainers 468 to 325.

“The U.S. treasury chief’s pledge to support his country’s mortgage market didn’t seem to relieve ongoing concerns among foreign investors, who dumped shares for the 26th straight session,” said Bae Sung-young, an analyst at Hyundai Securities.

Foreign selling during the 26 consecutive sessions amounted to 7.27 trillion won, according to the Korea Exchange.

Most blue chips finished lower, with telecoms and builders leading the decline. The nation’s second-largest mobile carrier, KTF, tumbled 2.41 percent and top builder Daewoo Engineering and Construction slumped 2.66 percent.

Tech exporters, which lifted the key index in earlier trading, also finished in the red. Market heavyweight Samsung Electronics shed 0.18 percent to end at 567,000 won and its chip rival Hynix Semiconductor plunged 2.66 percent.

Financial shares also finished lower, with top lender Kookmin Bank slipping 1.69 percent and leading brokerage Samsung Securities tumbling 1.85 percent.

Steelmakers and shipyards, however, prevented the key index from falling further. Top steelmaker Posco added 1.57 percent and Hyundai Heavy Industries, the world’s largest shipbuilder, gained 1.12 percent. Samsung Heavy Industries, the world’s second-largest shipyard, also rose 3.5 percent, leading advances among Korean shipbuilders on expectations second-quarter profit will increase.

“People believe the impact of steel costs on earnings for shipbuilders may not be as big as earlier expected because the average price of ships they are building are higher,’’ said Lee Jae-kyu, an analyst at Mirae Asset Securities in Seoul.

STX Shipbuilding, the owner of Europe’s largest shipyard, added 1.4 percent.

Yonhap, Bloomberg


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