Good news in U.S., bad news for Kospi
Korean shares fell Thursday after the U.S. Federal Reserve maintained interest rates at their current level while boosting its assessment of the economy and labor market, and low international oil prices.
Due to strong U.S. government bonds and the Japanese yen, foreigners sold more than 200 billion won ($183 million) worth of local shares, but that was more than offset due to the purchase by the National Pension Service (NPS) of 300 billion won. The NPS had bought at least 100 billion in shares each day this week.
The benchmark Kospi dropped 10.56 points, or 0.54 percent, to close at 1951.02
Large-cap stocks, particularly IT companies such as Samsung Electronics and SK Hynix, were weak, while the construction, chemical, transportation and finance sectors gained.
The nation’s second-largest air carrier Asiana Airlines rose by 11.14 percent to close at 8,590 won, while memory chip makers SK Hynix slipped 3.66 percent close at 47,400 won. Samsung Electronics lost 1.31 percent to close at 1.36 million won.
The nation’s Internet portal giant Naver was down 5.28 percent fall to 736,000 won.
The won led declines in Asian currencies amid speculation that monetary easing by global central banks will prompt Korea to cut its record-low interest rates.
The won weakened 0.9 percent, the most since Jan. 20, to 1,093.94 to the dollar as of the 3 p.m. close in Seoul. It reached 1,094.61 earlier, the weakest since Jan. 9, and is down 0.3 percent this year. The Bloomberg JP Morgan Asia Dollar Index, a gauge of the 10 most-traded regional currencies, retreated 0.2 percent. South Korea’s government bonds advanced after the Federal Reserve yesterday kept its pledge to be “patient” on raising U.S. interest rates. The Fed cited international risks to the economy while boosting its assessment of U.S. growth.
The yield on notes due September 2024 fell four basis points, or 0.04 percentage point, to 2.23 percent, Korea Exchange prices show. That’s the lowest for a benchmark 10-year security in data compiled by Bloomberg since 2000. The five-year yield dropped two basis points to an unprecedented 2.07 percent, and that on three-year notes declined one basis point to 2 percent.
sakwon80@joongang.co.kr [BY KWON SANG-SOO, BLOOMBERG ]
with the Korea JoongAng Daily
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