Tue, April 17, 2012
Business > Markets

S.Korean shares fall on lingering concern over Europe

2012-04-17 07:45:51 GMT2012-04-17 15:45:51(Beijing Time)  Xinhua English

SEOUL, April 17 (Xinhua) -- South Korean shares fell for the second straight day on Tuesday as investors took cautious stance on expansion of their holding of stocks amid lingering concern over European debt crisis, analysts said.

The benchmark Korea Composite Stock Price Index (KOSPI) lost 7. 33 points, or 0.37 percent, to settle at 1,985.30. Trading volume stood at 441.22 million shares worth 3.93 trillion won (3.44 billion U.S. dollars).

The KOSPI started lower after tech stocks on Wall Street tumbled overnight led by Apple stocks that dropped more than 4 percent amid worries about iPad and iPhone sales.

The key index turned into positive terrain during the trading amid views of undervaluation, but it ended up bearish due to the remaining concerns over the European fiscal crisis.

In Europe, yields on Spain's 10-year government bonds rose above 6 percent for the first time since November, and the cost of insuring its debt from default hit a record high.

"Investors are still grappling with the Europe's debt problems, but there are low expectations for liquidity injection by major central banks such as the U.S. Federal Reserve and the European Central Bank (ECB)," Yoo Kyung-ha, an analyst at Dongbu Securities in Seoul, told Xinhua.

Yoo said that the KOSPI was expected to be supported at the 120- day moving average of 1,930 points, but the analyst noted local stocks will make its correction for the time being. He estimated that the KOSPI may find its clue for upward momentum if China eases its rules on the real estate market in the second half of this year.

Foreign investors led the market decline. Foreigners dumped a net 304.9 billion won worth of local shares, keeping its spree for the sixth consecutive session. Foreign sentiment on local stocks was damped following the announcement of weaker-than-expected employment data in the U.S.

Retail investors limited the KOSPI's further decline by purchasing a net 211.5 billion won worth of stocks, the second straight session of buying. Local institutions shifted to net buyers, but buying volume stood merely at 8.7 billion won.

Large-cap shares ended mixed. Market bellwether Samsung Electronics slid 0.79 percent to 1,249,000 won, and memory chip giant SK Hynix plummeted 3.25 percent to 28,300 won. Leading chemical firm LG Chem dipped 1.66 percent to 356,000 won, and top wireless carrier SK Telecom retreated 1.44 percent to 137,000 won.

The nation's largest shipbuilder Hyundai Heavy Industries gained 0.81 percent to 310,000 won, and consumer electronics giant LG Electronics advanced 0.92 percent to 76,700 won.

The local currency finished at 1,140.5 won against the greenback, down 2.0 won from Monday's close.

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