Third-quarter queasiness dogs market

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Third-quarter queasiness dogs market


Korean shares experienced a gloomy day as foreign investors off-loaded local shares in response to the strengthening dollar.

The benchmark Kospi closed at 1,976.16 points, 0.77 percent lower.

Major conglomerates showed an overall decline mainly due to concerns about third-quarter performance. An exception was LG Electronics, which gained 3.34 percent to 64,900 won.

Market bellwether Samsung Electronics fell 1.3 percent to 1,141,000 won ($1,075).

Hyundai Motor shrank 4.51 percent to close at 180,000 won, while affiliate Kia Motors dropped 0.37 percent to 54,300 won.

Posco was down 2.83 percent to 308,500 won.

Shipbuilders were especially hurt by third-quarter performance speculation.

Hyundai Heavy Industries sank 5.64 percent to 125,500 won, while Daewoo Shipbuilding and Marine Engineering lost 3.88 percent to 18,600 won. Samsung Heavy Industries was down 2.95 percent to a record low of 23,050 won. Meanwhile, Hanjin Heavy Industries was up slightly by 0.79 percent to 5,110 won.

“It seems some investors are taking profit, betting that recent price gains were excessive,” said Moon Hong-cheol, a Seoul-based fixed-income analyst for Dongbu Securities.

The won fell this week as the dollar strengthened against the yen. Korea’s currency slid 1.6 percent since Sept. 26, the biggest weekly decline since January, to 1,061.38 per dollar. It appreciated 0.1 percent yesterday. Against its Japanese counterpart, the won weakened 1.9 percent this week to 9.74 per yen.

The three-year bond yield fell below the Bank of Korea’s 2.25 percent benchmark rat to a record low after reports showed factory output unexpectedly shrank in August and inflation in September was at a seven-month low.

Finance Minister Choi Kyung-hwan said Tuesday that Korea faces difficulties, including weak domestic demand, fueling speculation interest rates will be lowered further.

The yield on notes due June 2017, which had dropped seven basis points since Sept. 26, rose two basis points yesterday to 2.25 percent at the close in Seoul. The five-year yield also fell 11 basis points, or 0.11 percentage point, to 2.44 percent.

BY KIM JI-YOON, BLOOMBERG [jiyoon.kim@joongang.co.kr]


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