After rebound, stock market off 0.34%

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After rebound, stock market off 0.34%

Korean shares fell 0.34 percent yesterday as uncertainty continued to spread among investors over the possibility that the U.S. Federal Reserve is poised to taper its quantitative easing. Though retail and institutional investors were net purchasers of local stocks, foreign investors were large sellers.

The benchmark Kospi dropped 6.19 points to close at 1,824.16 yesterday in Seoul. Stock prices rebounded on Tuesday, backed by institutional investors. However, the Kospi fell yesterday ahead of Fed Chairman Ben S. Bernanke’s speech on Wednesday, U.S. time.

The country’s four largest cap shares gained ground. Samsung Electronics was up 0.89 percent to close at 1.2 million won. Shares of Hyundai Motor revved up 0.69 percent to 219,000 won ($192.72), while shares of Posco increased 0.33 percent to 301,500 won. Kia Motors rose 0.83 percent to 60,900 won.

Meanwhile, shares of IT-related companies fell. SK Hynix dropped 3 percent to 27,500 won, SK Telecom dialed down 0.7 percent to 211,500 won. Shares of NHN fell 5.25 percent to 280,000 won, while shares of SK Innovation dropped 0.72 percent to 138,000 won.

Meanwhile, the Korean won rose for a second day, climbing 0.5 percent to 1,135.97 versus the U.S. dollar in Seoul. It jumped 0.9 percent on Tuesday, the biggest gain since Feb. 4.

“Volatility going down means a decrease in uncertainties, and it could be lifting sentiment on the won,” said Hwang Sun-min, a currency dealer at Kookmin Bank. “I wouldn’t say uncertainties regarding the Fed’s stimulus exit strategy are gone. Investors are waiting for Bernanke’s comments later today to get a better picture.”

Along with Bernanke’s speech, minutes will be released of the Federal Open Market Committee’s June 18-19 meeting, after which the chairman said the Fed may begin to slow its $85 billion monthly bond purchases this year.

The yield on the 2.75 percent government notes due in June 2016 fell six basis points to 2.94 percent, according to Korea Exchange prices.

The Bank of Korea is forecast to keep its benchmark interest rate at 2.5 percent at a monetary policy meeting today.



BY LEE EUN-JOO, BLOOMBERG [angie@joongang.co.kr]

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