Markets edge down as won falls in value
Korean stocks closed lower yesterday as investors dumped most blue chips on concerns over fluctuations due to the expiration of futures and options, analysts said. The local currency plunged against the greenback after offshore investors continued their selling of stocks here.The benchmark Korea Composite Stock Price Index lost 21.74 points, or 1.48 percent, to 1,443.24. Volume was moderate at 357 million shares worth 6.08 trillion won ($5.46 billion), with losers outpacing gainers, 420 to 374.
“The key index, which fell in the morning over precautions ahead of the central bank’s rate meeting, fell further as uncertainty on the quadruple-witching day triggered selling by institutional and foreign investors,” said Bae Sung-yung, an analyst at Dongbu Securities. Bae was referring to the expiration on Thursday of stock index futures, stock index options, stock options and single stock futures. Quadruple witching days usually result in price swings.
The decision to leave the nation’s key borrowing rate unchanged did not largely affect the market, as most players anticipated a freeze, according to Bae.
The Bank of Korea froze the benchmark seven-day repurchase agreement rate at a nearly eight-year high of 5.25 percent.
Finance issues lost the most, with top lender Kookmin Bank slumping 4.14 percent to 57,900 won and leading nonlife insurer Samsung Fire and Marine falling 2.96 percent to 197,000 won. Telecom and steel stocks also ended in the minus column. Leading mobile carrier SK Telecom slid 3.13 percent to 201,000 won and smaller rival KTF also tumbled 4.79 percent to 27,850 won. Top steelmaker Posco fell 1.3 percent to 416,500 won. Tech exporters also closed lower, reversing gains in earlier trading. Samsung Electronics slumped 0.92 percent to 537,000 won and LG Electronics also fell 1.53 percent. Hynix Semiconductor, however, rose 1 percent to 20,300 won after Goldman Sachs forecasted a recovery in the DRAM market next year.
Top builder Daewoo Engineering and Construction also advanced 2.71 percent to 13,250 won.
The local currency closed at 1,109.5 won to the dollar, plunging 14 won from Wednesday’s close as offshore investors pulled money out of local stocks to purchase the greenback, dealers said. Yonhap
with the Korea JoongAng Daily
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