Wed, May 23, 2012
Business > Markets

S. Korean shares fall on lingering Europe woes

2012-05-23 08:05:46 GMT2012-05-23 16:05:46(Beijing Time)  Xinhua English

SEOUL, May 23 (Xinhua) -- South Korean shares fell for the first time in three sessions on Wednesday as foreign investors continued to pull back from the local stock market amid lingering concerns over Europe's debt crisis.

The benchmark Korea Composite Stock Price Index (KOSPI) declined 20.07 points, or 1.1 percent, to close at 1,808.62. Trading volume stood at 440.97 million shares worth 4.15 trillion won (3.54 billion U.S. dollars).

The KOSPI started lower, and stayed in negative terrain throughout the session as foreign investors kept their selling spree on concerns that the upcoming European Union (EU) summit may not find solution to the region's crisis and Greece may exit the euro zone.

The EU leaders were scheduled to meet for an informal summit in Brussels on Wednesday in a bid to come up with ways to ease market fears over the Greek exit from the euro zone, but the fears even strengthened after former Greek prime minister mentioned the possible exit.

Lucas Papademos, former Greek prime minister, told media that preparations for Greece's exit from the euro zone are being considered and warned that dropping the single currency would have "catastrophic" economic consequences for the debt-ridden nation and the rest of the euro zone.

Adding to the fears, the Organization for Economic Cooperation and Development (OECD) warned on Tuesday that the 17 nations using the euro are at risk of falling into a "severe recession."

Offshore investors kept their selling spree for 16 straight sessions. Foreigners dumped a net 382 billion won worth of local shares, sending their total selling volume for this month to around 3.6 trillion won. They bought around 1,300 contracts for the KOSPI200 index futures.

Local institutions limited the KOSPI's further decline by purchasing a net 176.9 billion won worth of stocks. Institutional investors bought shares this month except for three trading sessions. Retail investors were also net buyers worth a net 168.7 billion won worth of stocks.

Telecommunication shares led the market decline. Top wireless carrier SK Telecom dropped 311 percent to 124,500 won, and the country's No.2 fixed-line operator KT Corp. slid 1.91 percent to 28,300 won.

Tech and auto shares lost ground. Market bellwether Samsung Electronics retreated 1.53 percent to 1,221,000 won, and memory chip giant SK Hynix plunged 4.88 percent to 22,400 won. Consumer Electronics giant LG Electronics slipped 3.69 percent to 65,200 won, and top automaker Hyundai Motor dipped 1.48 percent to 233, 500 won.

Some banking and food shares ended bullish. The nation's fifth- largest lender Korea Exchange Bank (KEB) gained 1.48 percent to 8, 250 won, and confectionery maker Orion advanced 2.24 percent to 869,000 won.

The local currency finished at 1,172.9 won against the greenback, down 9.7 won from Tuesday's close.

Bond prices ended mixed. The yield on the liquid three-year treasury notes closed steady at 3.36 percent, but the return on the benchmark five-year government bonds fell 0.01 percentage point to 3.48 percent.


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