S. Korean Shares Close 1.87% Lower

South Korean stocks closed down 1.87 percent Wednesday as blue chips suffered on worsened U.S. economic indicators and a possible overhaul of local shipbuilding and construction sectors. The local currency rose against the greenback.

The benchmark Korea Composite Stock Price Index (KOSPI) tumbled 19.34 points to 1,016.82. Volume was moderate at 398.2 million shares worth 4.14 trillion won (2.87 billion). Losers outnumbered gainers 616 to 205.

"Worsening data from the U.S. economy and uncertainty in the future of the shipbuilding and construction sectors, caused by pressure to restructure themselves, is putting pressure on the key index for the time being," Bae Sung-yung, an analyst at Hyundai Securities, was quoted as saying by Yonhap News.

The U.S. Labor Department reported Tuesday that the nation's wholesale prices plunged by a record amount in October, while the American homebuilders' confidence index for November dropped to a new all-time low.

Shipbuilders and construction shares led the overall decline as investors feared that industry-wide restructuring could bring a halt in orders for the near future. Hyundai Heavy Industries, the world's largest shipyard, fell 3.63 percent to 146,000 won and leading builder Daewoo Engineering & Construction slipped 1.25 percent to 8,700 won.

Steel and heavy machinery issues also finished in the minus column. Top steel maker POSCO tumbled 1.5 percent to 295,500 won and Doosan Heavy Industries slumped 3.73 percent 54,200 won.

Tech exporters, however, gained ground on bargain hunting. Market heavyweight Samsung Electronics rose 0.69 percent to 438,000 won and its consumer electronics rival LG Electronics climbed 1.53 percent to 73,100 won.

The local currency closed at 1,446.5 won to the dollar, up 1.5 won from Tuesday's close, as offshore investors sold the greenback on a perception that the dollar may have hit a short-term peak.