Bad day for financial institutes hits index

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Bad day for financial institutes hits index

Korean stocks ended 0.13 percent lower yesterday mainly due to losses in banks and insurers. The local currency fell against the U.S. dollar.

The benchmark Kospi fell 2.49 points to 1,961.94. Trading volume was moderate at 394.3 million shares worth 4.4 trillion won ($4 billion), with decliners outnumbering gainers 445 to 370.

“Basically, we didn’t have much good news from abroad. There were concerns over U.S. growth as well as the Italian stock market’s sharp fall,” said Cho Byung-hyun, an analyst at Tong Yang Securities.

“But volatility stemming from a weakening yen seems to be calming down.”

Financial firms and insurers led the decline. No. 4 banking group Shinhan Financial lost 2.27 percent to 40,950 won and top life insurer Samsung Life Insurance fell 1.87 percent to 105,000 won.

Oil refiner S-Oil slumped 1.9 percent to 97,900 won after releasing its fourth-quarter earnings. The No. 3 player said its net profit tumbled 99 percent from a year earlier due to a sluggish refining margin.

In contrast, autos outperformed the Kospi. Top automaker Hyundai Motor rose 0.74 percent to 205,000 won and its auto parts affiliate Hyundai Mobis jumped 4.78 percent to 285,000 won.

Market bellwether Samsung Electronics also went up 0.56 percent to 1.448 million won, rising for a third consecutive session.

The local currency closed at 1,089 won against the greenback, down 3.5 won from Wednesday’s close, following remarks by a government official that the government is poised to tighten its regulation of capital flows in and out of the country, dealers said.

The government wants to cut the “vicious cycle” in which fast money inflows increase won volatility, Deputy Finance Minister Choi Jong Ku said yesterday in Seoul, adding that he sometimes questions whether a flexible exchange rate is “appropriate” for Korea.

Bond prices, which move inversely to yields, closed higher. The yield on three-year Treasuries slipped 0.02 percentage point to 2.76 percent and the return on the benchmark five-year government bonds also inched down 0.01 percentage point to 2.89 percent.

Yonhap, Bloomberg
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