Shares dip 1.15% on fading hopes of US stimulus

Korean stocks closed 1.15 percent lower Thursday as investors lost confidence in further U.S. stimulus measures, analysts said. The local currency fell against the U.S. dollar.

The benchmark Korea Composite Stock Price Index (KOSPI) retreated 22.16 points to 1,906.38. Trading volume was heavy at 703.1 million shares worth 4.71 trillion won ($4.16 billion) with losers outstripping gainers 525 to 287.

"Investors lowered expectations from the Fed, since the latest Beige Book showed no indication of credibility over further bond purchases," said Lee Yeon-shin, an analyst at Kyobo Securities Co.

Investors now want a "sustainable market," based on the view that the U.S. economy is seen as heading for moderate growth, but the spark for growth is less likely a scenario, Lee added.

Foreigners sold off a net 152.9 billion won on the main bourse, contributing to the index's fall and marking the third straight session of net selling.

Most shares lost ground across the board, with steelmakers and brokerages leading the decline. No. 1 steelmaker POSCO fell 2.39 percent to 367,000 won and zinc smelter Korea Zinc plunged 4.67 percent to 408,000 won.

Industry leader Samsung Securities shed 1.41 percent to 48,950 won, with smaller rival Woori Investment & Securities slumping 3.04 percent to 11,150 won.

Earlier in the day, the local bourse operator released the first-half earnings of local listed firms, which sank nearly 24 percent on-year, dampened by global uncertainties.

Blue chips also finished bearish. Top-cap Samsung Electronics slid 1.22 percent to 1,215,000 won, snapping its two-day gaining streak. The world's largest shipyard Hyundai Heavy Industries sank 2.92 percent to 233,000 won.

The local currency ended at 1,134.0 won against the greenback, down 0.6 won from Wednesday's close, as foreigners reduced their holdings of local equities, dealers said.

Bond prices, which move inversely to yields, closed higher. The yield on three-year Treasuries fell 0.01 percentage point to 2.78 percent and the return on the benchmark five-year government bonds slid 0.01 percentage point to 2.87 percent. (Yonhap)