Seoul shares fall 0.5 percent due to rate freeze

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Seoul shares fall 0.5 percent due to rate freeze

Korean stocks closed 0.5 percent lower yesterday on institutional sell-off amid the central bank’s decision to freeze its key interest rate, analysts said.

The local currency gained to a 17-month high against the U.S. dollar.

The Kospi shed 10.13 points to finish at 1,996.67. Trading volume was moderate at 466.5 million shares worth 4.36 trillion won ($4.13 billion) with losers outnumbering gainers 443 to 370.

“Concern over listed firms’ stagnant earnings in the fourth quarter continued to weigh down on investor sentiment amid the central bank’s decision to freeze the key rate,” said Bae Sung-young, an analyst at Hyundai Securities.

“However, the decrease was limited on improved economic data from China, the U.S. and the euro zone,” Bae added. “The Kospi will continue to hover below 2,050 points until the end of January, when listed firms finish announcements of their fourth-quarter earnings.”

Institutions offloaded a net 155 billion won, and foreign investors sold a net 7.8 billion won, while retail investors scooped up a net 167.4 billion won.

Brokerage houses lost ground as investors sought for profit-taking, with KDB Daewoo Securities falling 4 percent to 12,000 won and Samsung Securities losing 2.88 percent to 53,900 won.

Textiles and heavy machinery maker Hyosung lost 5.01 percent to 66,400 won on worries over its weak fourth-quarter earnings.

LG Household and Health Care, the country’s second-largest cosmetics firm, moved down 2.11 percent to 650,000 won on foreign selling.

In contrast, Ssangyong Motor, Korea’s smallest automaker, soared 7.51 percent to 6,440 won after it agreed with its union to reinstate 455 workers who have been on unpaid leave for years.

State-run electricity provider Korea Electric Power Corporation increased 2.59 percent to 33,650 won on the government’s plan to raise the electricity fees by 4 percent. Meanwhile, Korea Gas Corporation moved down 0.76 percent to 79,400 won.

Tech shares also traded higher, with market behemoth Samsung Electronics moving up 0.2 percent to 1,533,000 won and top chipmaker SK Hynix adding 1.12 percent to 27,100 won. Yonhap
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