Rough day for autos but Kospi unruffled

Korean stocks closed 0.23 percent lower yesterday as investor sentiment remained cautious over a deal to rescue the debt-mired euro zone, analysts said. The local currency rose against the U.S. dollar.

Kospi dropped 4.16 points to finish at 1,821.22. Trading volume was light at 208 million shares worth 2.36 trillion won ($2.03 billion) with decliners outstripping gainers 485 to 305.

“There’s a perspective that the summit will again stop short at a mere declaration, which unnerves investors. Unless this psychological fear wanes, the market will have no choice but to sidle along for some time,” said Han Beom-ho, an analyst at Shinhan Investment.

Prospects for the two-day European Summit this week reaching a breakthrough in tackling the region’s crisis are grim, as Germany has been resisting the use of the stability funds for troubled banks.

The Kospi traded in a tight range, as losses driven by steelmakers and auto manufacturers were capped by gains in some large-cap shares. Equities purchased by retail and institutional investors also lent support to the key index in the face of a foreign selloff.
Foreigners unloaded shares worth 315 billion won, while retail and institutional investors scooped up 245.6 billion won and 94.6 billion won, respectively.

Top steelmaker Posco fell 1.78 percent to 359,000 won and leading automaker Hyundai Motor dropped 1.04 percent to 238,500 won.

Heavy industries also declined, with leading power equipment maker Doosan Heavy Industries sinking 1.26 percent to 54,700 won.

Market bellwether Samsung Electronics, however, erased losses for the last three trading days to advance 0.62 percent to 1,139,000 won.

Telecoms gained ground, with industry titan KT surging 3.02 percent to 28,950 won on media reports that it is mulling a changeover to a holding company. SK Telecom also rose 1.65 percent to 123,500 won.

The local currency ended at 1,158.40 won against the greenback, up 3.3 won from Monday’s close, despite the foreign selling of local shares, dealers said.

Bond prices closed unchanged. The yield on three-year Treasuries was 3.29 percent and the return on benchmark five-year government bonds 3.41 percent. Yonhap