U.S. bank outlook hurts Korean lenders
Korean stocks closed 1.3 percent lower yesterday as banking shares lost substantial ground, tracking U.S. banking falls, analysts said. The local currency fell against the U.S. dollar.The benchmark Korea Composite Stock Price Index slid 15.16 points to 1,146.95. Volume was moderate at 368.93 million shares worth 4.40 trillion won ($3.17 billion), with losers outpacing gainers 482 to 344.
“The financial sector’s steep fall led the key index slide as investors predicted a stalled U.S. bank rescue plan will weigh down on local banks,” said Seo Dong-pil, an analyst at Hana Daetoo Securities.
Financial shares shed substantial ground as U.S. banking shares fell sharply on the rescue plan’s delay. KB Financial Group, which controls top lender Kookmin Bank, sank 5 percent to close at 35,150 won and Shinhan Financial Group, whose flagship unit is Shinhan Bank, slipped 7.19 percent to 26,450 won on speculation the company might issue new shares to increase capital.
Large-cap tech shares were also dented with market bellwether Samsung Electronics shedding 2.97 percent to 473,500 won. Smaller rival LG Electronics dropped 1.25 percent to 71,100 won.
Shipbuilders, however, extended gains for a second day on solid foreign buying. Market leader Hyundai Heavy Industries gained 2.75 percent to 205,500 won, and Daewoo Shipbuilding and Marine Engineering rose 3.61 percent to 21,500 won after the shipbuilder reported its fourth-quarter net profit increased more than five-fold to a record high. Hyundai Mobis, the auto parts producing unit of Hyundai Motor, spiked 4.29 percent to 68,000 won after it reported fourth-quarter earnings reached a record high on a weak won.
The local currency ended at 1,390 won to the dollar, down 10.5 won from Friday’s close, amid bleak exports forecasts. Korean exports tumbled a record 32.8 percent January from a year earlier, government data showed.
Korea Electric Power Corp., the country’s biggest electricity producer, dropped the most in more than two weeks on speculation earnings may not recover this year because of slower economic growth and a weak won. The shares fell 4.1 percent to close at 27,100 won, the largest decline since Jan. 15. Yonhap, Bloomberg
with the Korea JoongAng Daily
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