Shares end down as G-20 Summit begins

Korean stocks finished 1.48 percent lower yesterday as institutional investors cut holdings amid tumbles in LG Electronics and its affiliates, analysts said. The local currency declined against the U.S. dollar.

The benchmark Kospi lost 28.05 points to 1,869.96. Trading volume was moderate at 427 million shares worth 6.2 trillion won ($5.47 billion) with losers leading gainers 561 to 269.

Institutional investors reduced a net 177.8 billion won worth of local stocks during the session, as concerns persist on Greece’s fate in the euro zone.

Select stocks showed bullish runs, including Hyundai Wia Corp., which rose 3.2 percent to 159,500 won, the highest since Sept. 22. Meritz Securities Co. said in a report yesterday the auto parts maker, which has Kia Motors as its second-biggest shareholder, will benefit from a plan by Kia to build a third plant in China.

Shipyards staged a bearish run. Daewoo Shipbuilding & Marine Engineering Co., a shipyard that on Wednesday reported a 56 percent drop in third-quarter operating profit, lost 5.7 percent to 24,750 won. JPMorgan Chase & Co. cut its stock rating to “neutral” from “overweight.” NH Investment & Securities Co. and LIG Investment & Securities Co. also reduced their share-price estimates, estimating that DSME’s earnings would decline in coming quarters.

Its bigger rival Hyundai Heavy Industries, the world’s No. 1 shipbuilder, dropped 2.27 percent to 280,000 won.

The local currency closed at 1,129.9 won to the greenback, down 8.1 won from Wednesday’s close, as investor appetite for risky assets failed to return, dealers said.

Bond prices, which move inversely to yields, closed higher. The yield on three-year Treasuries fell 0.04 percentage points to 3.43 percent and the return on the benchmark five-year government dropped 0.05 percentage points to 3.54 percent.

Global financial market has been closely watching the outcome of the G-20 Summit in Cannes, France, set to continue today, as German and French leaders holding emergency talks on the eve of the summit withheld 8 billion euros ($11 billion) of assistance yesterday.

Greek Prime Minister George Papandreou’s bid on Monday to hold a referendum on the European bailout offer ramped up fears of a disorderly default.

Bloomberg, Yonhap