Institutional sell-off pushes market down
The drop was affected by overnight figures from the U.S. Labor Department that showed employers added fewer workers to payrolls than projected in September.
At the same time, the unemployment rate in the United States fell to 7.2 percent, which is the lowest level since November 2008.
The benchmark Kospi fell 0.99 percent, or 20.37 points, to close at 2,035.75 in Seoul. It is the first time in five days that the index fell after reaching a high for the year of 2,056.12 on Tuesday.
Except for Posco and Kia Motors, prices of Korea’s top 10 blue chip shares went down. The country’s largest steelmaker gained 0.16 percent to close at 320,000 won ($302) and the second-largest carmaker jumped 0.31 percent to 63,700 won.
Shares of Samsung Electronics dropped 0.89 percent to close at 1.44 million won, while shares of Hyundai Motor, the country’s largest automaker, fell 1.52 percent to 258,500 won. Shares of Hyundai Mobis also declined 0.86 percent to 288,500 won.
Financial shares also lost ground.
Shinhan Financial Group shares dropped 2.96 percent to 45,850 won, while shares of KB Financial Group fell 3.5 percent to 41,400 won. Shares of Hana Financial Group sank 2.78 percent to 40,200 won.
The Korean won, meanwhile, rose to its strongest level since January as U.S. employers added fewer jobs than forecast, bolstering the case for the Federal Reserve to delay cutting back on its bond-buying stimulus. Government bonds gained.
Korea should closely monitor and prepare for changes in external conditions, including any stimulus reduction by the U.S. Federal Reserve, Bank of Korea Governor Kim Choong Soo said in Seoul yesterday. U.S. employers added 148,000 workers last month, compared to the 180,000 forecast in a survey of economists.
“The main news of the day was the worse-than-expected U.S. jobs data, which affirmed the consensus that the Fed taper will be delayed,” said Son Eun-jeong, a currency analyst at Woori Futures. “The won led the rally among emerging currencies as foreign inflows continued.”
The currency advanced 0.5 percent to 1,056.18 per dollar in Seoul and touched 1,055.04, the strongest level since Jan. 15, according to data.
BY LEE EUN-JOO, BLOOMBERG [email@example.com]
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