Kospi falls as investors worry over Europe

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Kospi falls as investors worry over Europe

Korean shares dropped slightly on Monday largely due to resurfacing risks in overseas markets and investors engaging in short-term sell-offs.
The Korean benchmark index Kospi closed at 1,920.95 on Monday, falling 3.75 points, or 0.19 percent, from the previous day.
According to a report by Korea Exchange, the Kospi slid after a three-day rally due to external factors such as jitters in the eurozone and falling international oil prices.
Foreign investors sold off a total of 85.7 billion won ($78 million) worth of local shares, leading the market slide.
While small cap shares rallied owing to the government’s willingness to support small businesses, large cap shares fell 0.2 percent overall, contributing to the decline.
Besides Samsung Electronics, SK Hynix, SK Telecom and AmorePacific, most large cap shares decreased.
Samsung Electronics rallied 0.15 percent to 1.32 million won, SK Hynix rose 1.21 percent to 50,300 won and SK Telecom inched up 0.38 percent to 267,000 won.
Hyundai Motor dipped 1.39 percent to 177,500 won while Naver went down 0.27 percent to 750,000 won. Samsung SDS plunged 3.83 percent to 289,000 won.
The yield on government bonds due December 2017 fell as much as eight basis points, or 0.08 percentage point, to 1.98 percent in Seoul, an all-time low for a benchmark three-year note. It was 2.01 percent as of the close in Seoul, Korea Exchange prices showed. The five- and 10-year yields sank as low as 2.13 percent and 2.45 percent, respectively.
“The bond market reacted to the president’s comments on interest rates,” said Park Dong-jin, a Seoul-based fixed-income analyst at Samsung Futures. “Interest in today’s comments was very high, as there are not many factors to move the market at the moment.”
The won strengthened to a two-month high after U.S. jobs data suggested the labor market recovery in the world’s biggest economy is too weak for the Federal Reserve to start raising interest rates, which pushed the dollar down.
Korea’s currency advanced 0.8 percent to 1,081.49 a dollar in Seoul, rising for a third day.
BY SONG SU-HYUN, BLOOMBERG [ssh@joongang.co.kr]

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