Shares fall 1.1% on pre-summit eurozone gloom
Korean stocks fell 1.1 percent Wednesday on concerns a European Union (EU) summit may not be able to resolve the region's mounting debt woes, analysts said. The local currency fell against the U.S. dollar.
The benchmark Korea Composite Stock Price Index (KOSPI) lost 20.07 points to 1,808.62, snapping a two-day gaining streak. Trading volume was moderate at 438 million shares worth 4.14 trillion won ($3.54 billion), with losers clearly outpacing gainers 557 to 265.
"The global economic fundamentals are not too bad, but the market is being rocked by Europe's uncertain political future ahead of the critical summit," said Shim Jae-youp, a strategist at Shinhan Investment Corp.
EU leaders were scheduled to meet for an informal summit in Brussels on Wednesday (local time).
Kim Jeong-hwan at Daewoo Securities Co. added there is currently no direction in the market and investors need to take a long-term approach.
"At present, there is no need to linger on any particular gains or losses since such developments are unlikely to translate into a trend," he said.
Others said earlier remarks by the former Greek prime minister that Athens had made preparations to leave the eurozone, and the downgrading of Japan's sovereign rating by Fitch Ratings contributed to the local market's weak showing.
Many big caps lost ground, with electronics, information technology and autos leading the fall.
Market bellwether Samsung Electronics gave up 1.53 percent to 1,221,000 won, with SK hynix plunging 4.88 percent to 22,400 won.
LG Electronics, a leading electronic appliance manufacturer, dropped 3.69 percent to 65,200 won.
Shares of top automaker Hyundai Motor fell 1.48 percent to 233,500 won, while No. 2 industry player Kia Motors surrendered 0.79 percent to 75,500 won.
Leading steelmaker POSCO sank 0.99 percent to 351,500 won, with LG Chem, a globally established manufacturer of rechargeable batteries, posting a loss of 2.83 percent to 275,000 won.
Top refiner SK Innovation also fell 2.81 percent to 138,500 won, while Hyundai Heavy Industries, the world's largest shipmaker, sank 2.86 percent to 255,000 won.
The local currency finished at 1,172.9 won to the U.S. greenback, down 9.7 won from Tuesday's close, as the market shunned risks, dealers said.
Bond prices, which move inversely to yields, closed mixed. The yield on three-year Treasuries remained flat at 3.36 percent, while the return on the benchmark five-year government bonds edged down 0.01 percentage point to 3.48 percent. (Yonhap)