Kospi falls 2.2% in year’s first trading

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Kospi falls 2.2% in year’s first trading

Korean shares dropped more than 2 percent yesterday on the first trading day of the new year after figures from China showed that its manufacturing index fell in December.

The benchmark Kospi fell 2.2 percent to close at 1,967.19 yesterday in Seoul. Foreign and institutional investors dumped more local shares than the amount retail investors net purchased.

China’s manufacturing purchasing managers’ index came in at 51 for December, said the National Bureau of Statistics and the nation’s logistics federation. That trailed the median economist forecast of 51.2 and was a decline from November’s 51.4.

“There’s a good long-term story for China with better quality economic growth, but the pains of the reform program are probably going to hold the markets back for the moment,” Gary Dugan, chief investment officer for Asia and the Middle East at Coutts & Co., the wealth management unit of Royal Bank of Scotland Group, told Bloomberg TV. “People are looking for buying opportunities, but they do need a good story.”

Blue-chip shares lost ground yesterday.

Shares of Samsung Electronics dropped 4.59 percent to close at 1.309 million won ($1,246) yesterday while shares of Hyundai Motor fell 5.07 percent to close at 224,500 won. Shares of Posco, the country’s largest steelmaker, also fell 1.38 percent to 322,000 won while shares of Hyundai Mobis declined 4.94 percent to close at 279,000 won. Shares of SK Hynix also slipped 3.4 percent to 35,550 won.

Among shares that rose were Naver, which went up 0.14 percent to 725,000 won, and Lotte Shopping, which jumped 0.5 percent to 406,000 won.

Financial shares dropped. Shares of Shinhan Financial Group fell 1.48 percent to close at 46,600 won while shares of KB Financial Group also declined 0.36 percent to 42,100 won. Shares of Hana Financial Group went down 0.11 percent to 43,850 won.

Meanwhile, Korea’s won continued a two-year advance to reach a 29-month high. The won climbed 0.5 percent to 1,050.32 per dollar in Seoul from 1,055.45 on Dec. 30, the last official day of onshore trading in 2013, according to prices from local banks compiled by Bloomberg. It reached 1,048.45, the strongest level since July 2011.

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